What to Expect Long-Term
Direct local investing is a slow and engaging, yet rewarding process. Local investors must have the passion, time, and energy to find and evaluate local investment opportunities, and for getting to know the people who offer these opportunities. Get-rich-quick investments may, in rare cases, be a result, but are not the norm, and certainly not the expectation of local investments.
For one thing, due to their very nature as private investments — i.e. not traded on a public exchange like the New York Stock Exchange or NASDAQ — they are considered illiquid, meaning they cannot be readily sold or exchanged for cash without a significant loss of value. Direct local investing requires a “buy and hold” mindset.
Depending on the type of security (link to Securities section), the return on your investment may be well-defined, as with a loan, or uncertain, as with shares of stock. Understanding the different types of securities, their risk, and their liquidity should all be considered as you’re doing your due diligence.