We have brought you to a style of money management based entirely on assets. Assets are the building blocks of investment. Products are only assemblages of those building blocks. The question you must ask of ‘products’ is: do they help you to carry out your financial plans?

We make no secret of our belief that there is a strong case for ignoring products entirely (with the exception of widely diversified funds with low charges). This is not because there are no good products; it is because there are so many bad products and you cannot chose between the good and the bad.

The site module headed Warnings, summarised in Overview, contains a set of pages on the hurdles that can trip you up. You should treat these as essential to this Simple Money lesson. They can be read at any time.

Key points

• Costs are critical.

• Good products offer you convenience or a service which is worth something to you. Understand what you are paying and make your own judgement.

• Do not pay for outperformance: a) it is extremely rare, on a consistent basis, b) it is impossible to recognise until it is too late.

• If a product is not clear about its costs or its investment strategy, bin it. In short, opacity is a crime and a warning.

• If a product locks you in (typically through exit penalties), or has the capacity to lock you in, you need to consider very carefully whether you trust the product provider not to adversely change either its costs or its investment strategy.

• Remember you are not being offered altruism: you are being sold a product.

Your next steps

It is right that we make you wary of products. But it is also right that we note that the best ones do something you cannot do for yourself when you first start saving outside cash. And that is: diversify. You cannot economically buy enough single shares with small amounts of money to adequately spread your risk.

Easy Money and Simple Money are a sound enough basis for you to manage you money. If you want to move further into this world you need Hard Money.