Investing for Dummies Book Review

I always get a kick out of these ‘for Dummies’ book titles. If they used another derogatory term instead of ‘dummies ‘do you think they’d sell any books? Some alternative titles might read ‘Investing for complete idiots’ or ‘Investing for the mildly retarded…please stop drooling on the book and pay for it’. Like or hate the title of this book Investing for Dummies it is actually pretty good.

Main Themes & Topics

Mutual Funds
Stock & Bond Investing
Money Market accounts V.S. FDIC insured savings accounts
Real Estate
Entrepreneurial Start-up businesses
T-Bills and Municipal Bonds
Tax Considerations

Surprises
One thing Eric spends a good deal of time on is starting your own business. Most investment books don’t include this as an option. As an entrepreneur at heart I really enjoyed this part of the book. He provides a checklist of 10 characteristic an entrepreneur must have to be successful. While starting your own business is an exciting investment opportunity I think Micheal Gerber’s points on entrepreneurial start-ups should be considered. Investing for Dummies treats all businesses as the same and they just aren’t. You’ll need to read Micheal Gerber’s eMyth Manager book to understand what I’m saying.

Summary
This book is very good at giving a birds-eye-view on the world of investing and doesn’t go into too much depth. This is the book’s strength as well as the book’s weakness. It doesn’t teach you all the terms you’ll need to know in each of the subject. Instead it defines the key concepts and strategic considerations. It gives a rookie investor an idea of what to expect with different investment vehicles. If you’ve saved up some money to invest but don’t know where to start, this is the book for you!

Buy Investing for Dummies on Amazon

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When buying a digital camera one feature is talked about more than anything else…How many mega pixels does it have? More mega pixels means a better camera, right? Wrong! The bottleneck for digital camera quality used to be mega pixels. Going from a 1 Mega Pixel to a 2 Mega Pixel camera meant a huge increase in quality. As digital camera’s developed consumers became very sensitive to mega pixels. In fact, the entire digital photography market shifted into high gear to make cameras with more mega pixels. Consumers still believe that going from a 5 mega pixel to a 12 will increase the quality of their pictures. The truth is making that jump will most likely make worse pictures not better. Here’s why:

Pixelation VS Noise
Cameras with lower pixel counts have pixelation problems. When a camera has too many pixels without increasing the sensor size there are problems with noise. The happy medium for compact cameras is around 6 MP.

You can only make the pixels so small

To increase pixel count camera manufacturers have to fit more pixels on the same sensor. The sensor goes from looking like this:
Big fat juicy pixels
To this:
Crappy little pixels
At some point the pixels are so small that they can’t perform like they used to. When this happen more noise and errors occur. There is not enough area for a pixel to read the light correctly.

Image data is bigger too
Not only does it take longer for a camera to store large pictures you’ll spend more time uploading and editing them. Large pictures take up more space on your hard drive.

On a personal note, it bothers me when I want to take a follow-up picture and my camera isn’t ready. The extra time it takes to process the large pictures is the cause of this delay. To test this out for yourself try making the image size smaller. Notice how much quicker your camera is ready to take those follow-up shots?


How to fix the problem

There is a balanced ratio of pixels, to sensor size, to lens size. As you increase your pixel count the sensor size and lens needs to increase as well. Most people won’t appreciate their compact camera getting bigger and bigger as the sensor and lenses get larger. So the real solution is to get lower mega pixels with as large a sensors possible.

What if you buy a 12 MP camera and only use the 6 MP setting? Will this fix the problem?
No. Your sensor would read the new setting like this:
6megapixelpicture.jpg

You could not get around the problem by lowering your image size setting. The sensor has already been manufactured to fit all the pixels on it. The only way to fix the problem is to buy a camera that already has 5 to 6 MP as its maximum.

What the market has to offer

I did hours of research on dpreview.com to find the camera with a balanced ratio of sensor to mega pixels. More than 80% of the cameras made since 2005 have the smallest sensor available (1/ 2.5”). Those cameras with a tiny 1/ 2.5” sensor have been deleted from my list. Here’s an image showing the actual sensor sizes so you have an idea of what these numbers mean.

Click on Image to See the Actual Size of the Sensors

According to this article from 6mpixel.org to get 6mp you need a sensor of at least 2/ 3”. As far as I could see there isn’t a point and shoot made with those specifications. The only two options available are 1) Buy an SLR or 2) Get the biggest sensor available within the point and shoot category.

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