Category Archives: Money

Austerity and the European Economy

European money

Euro Money

Current Economic State in Europe

The European economy has experienced extreme economic trouble due to the recent worldwide economic crisis and has yet to embark on a recovery.  The economy is expected to shrink in 2013 for the second consecutive year.  The European Central Bank announced the region’s banks planned to repay less than half of expected amount of low-interest loans from last year and Moody’s Investors Service has downgraded Britain’s government bonds from its top AAA rating.  While many countries around the world have suffered from the economic downturn, Europe has continued to struggle and has yet to show progress towards revival. Read the rest of this entry

What is Demand-Side Economics?

Supply and Demand Cartoon

Supply and Demand Cartoon

As a venture capital firm, Effi Enterprises seeks out emerging businesses that are in need of the funding necessary to grow into a thriving, public company.  These early-stage companies have extreme potential for improvement, but assistance from a firm like Effi Enterprises is all they lack.  In exchange for equity in the company, venture capital firms will invest large amounts of financial capital into the startup to give it the boost necessary to become successful.  In demand-side economic theory, the government must take action to stimulate the economy when it is need and give it the necessary boost for recovery.

Introduction to Demand-Side Economics

Demand-side economics is an economic theory characterized by the idea that economic growth will be created by increasing the demand for goods and services.  Also known as Keynesian economics, demand-side economics strives to stabilize the economy through using government intervention.  To stimulate the economy, demand-side economics suggests the government should lower taxes on the middle and working class and increase government spending.  To prevent inflation, the government should raise taxes and reduce their spending.  Proponents of demand-side theory believe that when the economy is in a recession or economic downturn, the government should step in and take action to stimulate it. Read the rest of this entry

What is Supply Side Economics?


lowering income tax

Taxable Income

Efraim Landa is an entrepreneur that has founded Effi Enterprises to assist early-stage businesses in obtaining the funding and managerial assistance necessary to propel them into a public company in ten years or less.  Effi Enterprises understands the importance of investment and production efficiency to the success of a business and the economy as a whole.  These are the principles that underlie Supply-Side Economics.

Introduction to Supply-Side Economics

Supply-side economics is a macroeconomic theory that emphasizes the importance of increasing the efficiency of production, or supply, as the key to an economy’s potential for long term growth.  It maintains that aggregate supply constitutes the primary driving and stabilizing forces in the economy.  Focusing on alleviating barriers to higher productivity in supply, supporters of this theory advocate for lowering marginal taxes and deregulating heavily regulated industries. Read the rest of this entry

VC market in 2013


Mobile Technology


Efraim Landa is a venture capitalist who provides both funding and expertise to emerging companies. A venture capital firm typically works with a startup company that needs funding and support to handle those first turbulent years until they can make an IPO. When a VC firm invests in an emerging company it basically purchases a portion of the company in exchange for a profit that will come as the company matures. It is generally expected that a company will be able to transition from its inception to an IPO inside of 10 years with the average being somewhere around 5 to 7 years. The venture capital firm provides the necessary funds to keep the business running efficiently until the time when a profit can be made. Entrepreneurs and venture capitalists such as Efraim Landa also offer their working expertise to the business to help ensure their successful business venture. Many successful entrepreneurs have stated that the expertise that is gained from experienced businessmen is more valuable than the funding that was secured. Read the rest of this entry

VC Market in Singapore


flag of Singapore

Singapore flag

Efraim Landa is a venture capitalist who understands fully the challenges faced by an entrepreneur or a start-up business who is attempting to secure funding. A venture capital firm such as Effi Enterprises provides an investment into the business which is intended to provide the finances needed for the business to grow. VC firms are a type of high risk investment but they also have potential returns that are way above average. The venture capital firm invests finances into the emerging business in exchange for a return after the business becomes profitable. When a VC firm invests funds into a business, the goal is that within 10 years the company should be able to move from its inception to an Initial Public Offering (IPO). In most cases, an entrepreneur comes up with an ingenious idea, begins a business to market it and then enlists the help of a VC firm that can fund the business until it is profitable. Read the rest of this entry

What are the different types of Stocks?

Common Stocks

Common Stocks

The basic difference in stocks and bonds is that bonds are a debt while stocks are part ownership in a company. These are both valid and profitable ways to raise capital for a business. Effi Enterprises offers advice to companies which need to create value. They can help businesses achieve their financial goals and offer them many strategies for financial advancement to expand their marketing potential. There are many options for today’s business owners including stocks and bonds. There are two different types of stock options for investors to choose from.

Common Stocks

Common stocks are the most common and most of the stocks that are issued are common stocks. These stocks actually represent partial ownership in a company and therefore will receive dividends as a result. Those who purchase stocks are investing in the company so that the company can expand and realize profit. Each investor will also get one vote for each share that is purchased. With this vote they will elect board members who will make or oversee all the management’s major decisions.  This type of investment usually offers some of the highest returns over other investment options. Of course this is also associated with more risks as well. If the company is forced to liquidate those who hold common shares will not receive any money until after the creditors including bondholders have been paid.

Preferred Stock

The preferred stock also represents some ownership in a company, but without the same level of voting rights. Investors who purchase preferred shares are typically guaranteed a dividend which is fixed and ongoing. With common stock the dividends are not guaranteed at any time. And should the company be forced into liquidation, the preferred stock owner has a slight advantage over common stocks. They would be paid off after the debt holders, but before the common stockholders in this event. Preferred stock is also “callable.” This means that the company can choose to purchase the shares from the shareholders any time they decide to and for any reason. There are many who think that preferred stocks are more like a debt than equity. One way to classify them is to think of them as sitting between bonds and common shares in a company.

Different Classes of Stocks

Even though common and preferred stocks are the two basic types of stocks, companies always have the option of customizing their particular stocks into any package they feel will be appealing to their stockholders. Usually when stocks are customized it is because the company wants the voting power to be contained within a particular group. This way the company can classify the stocks so that they can manage their voters and still achieve the financial objectives. For instance they can set it up so that one group of stocks allows ten votes per share and another class of stocks only gets one vote per share. Berkshire Hathaway is an example of a business who offers more than one class of stocks. Usually they are assigned terms like Class A stocks and Class B stocks.

Advantages for Stockholders

Even though a person becomes a stockholder in a public company does not automatically mean that they have a large say in the day to day operations of the business. They will have the right to vote to elect a board of directors and thereby have some say in how the business is run. The goal is for it to all work together in the end so that the business benefits and can become more profitable from the investment; and the shareholder can profit from the company’s overall profits as well.

What are Bonds?



Companies need funds for many reasons such as expansions into new markets. The trouble with larger organizations and emerging companies is that they need more money than what they can obtain from a bank loan. Effi Enterprises works with companies to secure various means of financing such as venture capital, private equity financing, stocks and bonds or IPO’s. One solution that is offered to raise money for these companies is to issue bonds to the public market. Through offering bonds publically, it means that rather than looking for one huge investor, thousands of investors can lend a small portion of needed capital. A bond is essentially a loan in which the company is the lender. The company which sells a bond is called the issuer. It is sort of like an IOU given to a lender (the investor) by a borrower (the issuer).

There is a little more depth to it than a simple loan because most people do not loan out their money without expecting something in return. This means that the issuer must offer the investor something in exchange for the loan of their money. This comes from interest payments the rate of which is predetermined and they are made according to a schedule. The date which the issuer has to finish paying the borrowed amount is referred to as the maturity date. Bonds are classified as a fixed-income security because the amount that an investor will get in return is fixed as long as the bond is held until it matures.

What is the difference between stocks and bonds?

The difference in bonds and stocks is that bonds are a debt but stocks are equity. An investor can become part owner of a company by purchasing stock, or equity. But when an investor purchases debt, or bonds they become a creditor to the company. There is an advantage of becoming a creditor in that they will have a higher claim on assets than a shareholder will and if there was a failure causing a bankruptcy they would receive their money before the shareholders. The disadvantage is that a bondholder does not own shares of the company and it the company realizes large profits they will still only get their fixed amount in return. This means that owning bonds is less risky than owning stocks but there is also a much lower return.

Why purchase bonds?

It is true that stocks can offer a larger return than bonds, especially for time periods of at least 10 years. But that does not mean that investing in bonds is a bad investment. Bonds can be a good investment if you are unsure of the stock market’s short term volatility.

What types of bonds are available?

There are two basic types of bonds: municipal and corporate. Municipal bonds are also called “munis.” The returns on this type of bond will incur no federal taxes. Oftentimes local governments will also make their bonds tax free for residents which make them a completely tax free investment. These can be a great investment for many individuals. Corporations offer bonds in the say way it issues stocks. Sometimes a corporate bond is as short as a 5 year term, intermediate are 5 to 12 years and long term is anything over 12 years. These have a higher yield, but it also has higher risk involved. They are more likely to default than a government; but they can also be one of the most rewarding of all the fixed income investments. The credit quality of the company is also very important. Companies can also offer convertible bonds which can later be converted to stocks. Or they can offer callable bonds which the company can redeem before maturity.

What is a P/E ratio?

One of the primary objectives of Effi Enterprises is to help a company realize value. There can be many means through which the valuation of a company is achieved. Efraim Landa is a venture capitalist who is intent on helping emerging companies and entrepreneurs learn how to successfully manage the finances of the business. This includes helping businessmenconsider all available options including venture capital, IPO’s or strategic alliances or joint ventures. One thing that is commonly discussed among businessmen and investors it the P/E ratio.

P/E ratio

P/E ratio

What is the P/E Ratio?

The P/E Ratio is a proportion that can be used to learn about a company’s earnings and its value. P stands for Price, and E represents earnings. The price is relatively easy to find as it can be found through any vendor. The trading price for stocks is easily accessible through online resources. As an example, if a company’s stock is trading at $42 per share and the earnings for the last year was $1.55 per share, then the P/E ratio is found by dividing $42 by $1.55. The P/E ratio for the company’s stock would be 27.10. The earnings per share (EPS) is generally obtained by looking at the last four quarters but some prefer to take it from the estimates of what is expected over the upcoming four quarters or the projected P/E. Other companies will use the sum of the previous two quarters and the estimate of the upcoming two quarters.

What does the P/E Mean?

Generally a higher P/E will indicate to investors that they should expect an increased growth in earning in the future if it is compared to companies which have a lower P/E. But you cannot look solely at the P/E ratio. Typically, the P/E ratio is compared among companies in the same industry. It may also be compared to the overall market value or to the company’s previous ratios. It would not make any sense to compare a utility companies P/E ratio to one of a technology development company. In comparison the technology company would far surpass the utility company if based on the P/E ratio alone.

What the P/E ratio is used for is for investors to decide how much they are willing to pay per dollar of earnings. To interpret this let’s say a company is currently trading a multiple P/E at 20 which means that the investor would be willing to pay $20 for each $1 of earnings. For example’s sake we can say that Google is trading currently at $400 a share and the EPS is $13.31. That means that an investor can expect to earn $13.31 for each share that is available. But if Google only has 315 million shares which are outstanding shouldn’t they be available for $13 a share? No, simply because an investor plans on holding on to stocks for an extended amount of time, and they expect for the company’s stocks to increase in value during that time. That means that they will willingly pay a premium now hoping that they will get a higher return later. With a P/E ratio of about 30, an investor will pay 30 times more per share in Google.

The important thing for investors to note is that the P/E ratio is not the only influencer for making decisions. The P/E ratio has a higher quality based on the quality of the underlying earnings value. This is only one of the factors used to decide where to invest monies. Remember that investments are typically long term and after the initial purchase it is a game of waiting to see how much the price will increase until a profit is made.

How Does the Stock Market Work?

Efraim Landa and investment firms like Effi Enterprises are well acquainted with the workings of the stock market. They work with emerging businesses and help them gain value. One of the greatest steps for a company or a business is when they have become profitable enough to go public and make an Initial Public Offering (IPO) of their stocks. Typically a business idea begins with an entrepreneur who gets started and then outgrows their sources. This is when they look for a venture capitalist such as Efraim Landato help get them with funding options with the hope that there will be a day where they can make an IPO. This is when stocks in the company are available to the public through the stock market.

Stock Market

Stock Market

The stock market can be very confusing and those who are unsure about how it works can stand to lose a lot of money when they first start out. However, it is not as complex as it appears to be. Basically, you have the option of purchasing stocks in a company. Companies make these shares available as a way of funding their business. When someone purchases a company’s stock they do not own part of the company but are providing funds by which the company can grow. The more the company is worth, the more value their stocks become. Stocks are frequently traded back and forth on the “stock market.” There can be a few things that affect the price of stocks.

In one way it is as simple as the law of supply and demand. Stocks are available in a limited number and when there are a lot of people who want to buy stocks in a particular company the price will increase on their stocks. But when there is a decline in the number of buyers who want them, or there are a large number of people who want to sell the ones they have then the price on the stocks decreases. Theoretically the demand for stocks for a particular company will depend on how profitable the company is. However, what the company is expected to do in the future will also factor in to the value of the company’s stocks.

When a company goes public with their stock it is generally a way of increasing revenue. This is generally to be used for some form of expansion. Perhaps the business needs to add a new product or offer more services to their clientele. An IPO can be a way of raising those funds. The public can then invest in the company by purchasing the stocks.

The main goal of an investor is to make money on the stocks that are purchased. They will need to buy stock at a lower price and then when the price on the stocks goes up they will sell it off before it takes a downward turn. This will mean that stock holders will need to pay particular attention to the company’s value and the projected value of the company later on. Many times stock prices will go up before an earnings announcement but then decline if these earnings were much higher than what was generally expected.

A lot of novice investors think that when they purchase stocks they are going to receive from the company’s profits but this is not so. Some very large companies may pay a dividend and this is done a per share basis. But most companies hold on to their profits in order to pay for future growth. There are two schools of thought on this, some investors are interested in the company growing so that the stocks are worth more and others are more interested in investing in companies who are profitable enough to pay dividends. The type of stocks purchased will depend largely on a person’s investment goals.

The History of Money

Money is not a natural construct, it is an invention, like fire a tool that we use to live in the modern world, money did not start with big corporations, and although we think of money as these “bills” that we carry around or as a numbers on a bank statement money has come in many different forms through the millennia, from cattle to seashells to coins gilded out of precious metal…. Money had rather humble beginnings. In one way you could look at the development of money as the ultimate in entrepreneurship.



From about 9000 to 6000 BC there wasn’t any money to exchange.  That doesn’t mean that there was not some form of markets where people traded different assets; it’s just that assets looked a lot different back then. People bartered what items they possessed in order to obtain those which they did not. This is actually used today to some extent. Of course, we cannot take a couple of watermelons to the bank and ask them to send a fax for us in exchange; but if I grow watermelons and you grow chickens I can still trade you a couple of watermelons for a couple dozen eggs. (Believe it or not this happens all the time in some parts of the country!)

There are many other ways that we still use bartering. Inside prisons inmates will tell you that their currency is cigarettes. It is not a strange thing for individuals to trade skills. A hairdresser may offer to cut a man’s hair in exchange for an oil change on their vehicle. These types of trades occur all the time; all without money.

Money is the root of finance. But until 1200 BC nothing that even closely resembled money existed. And then it was only cowry shells. These shells became the first type of money or exchange in China. They served as money or currency for many years even up until the 1900s. The closest thing to metal currency occurred in China in about 1000 BC when they made a mock cowry shell. However, since knives, spades and other tools were made out of metal they were also used as money. These were the first models of the coins that we carry in our pockets today. The interesting thing about the Chinese metal coins is that they each had a hole so that they could all be put together to make a sort of chain.

The first silver coins were made in about 500 BC. They looked similar to what we use today and they bore images of their gods and emperors. These imprints let everyone know the value of each coin. Lydia was the first to use these coins but then other countries such as Romania, Persia, Greece and Macedonia all used them and began to improve them. These coins were very different than the Chinese coins in that they were not made from base metals, but of scarce ones like bronze, silver and gold which already had a lot of value.

Paper money also has its roots in China. They began the practice of using leather currency. They were primarily used as bank notes and exchanged for goods. They then moved on to paper money in China in the 9th to 15th centuries. But in 1455 using currency was completely gone from China because they had too much of the currency and it caused serious inflation.

In the 1500s the North American Indians used gifts for currency before switching to clam shells called Wampum. This was a string of beads that was made all from clam shells. They used this as a type of currency.

Finally in 1816 England put a value on gold. This is when currency began to be attributed to certain set amounts of gold. This helped protect the economy from inflation. The depression the in the 1930s started a worldwide effort to end the connection of currency to gold. Now most nations do not have any ties between gold and their currencies. There are other ways to try to avoid or control inflation.

Presently, nations exchange currencies think of the recent changes to the $100 bill and the $20 bill. Even coins have changed recently. The next big step in the world of finance is certainly digital cash, or electronic money. This is a form of money which is already begun to be exchanged via the Internet.