Do NOT put your money in unit trusts: repeat do NOT put your money in unit trusts: repeat….

If you’re looking for somewhere�for your savings, you’ll find a queue of people – banks, financial advisers, Hargreaves Lansdown, Fidelity, St. James’ Place,�and many others – all eager to get you to put your cash into unit trusts. Why? Because they care about your wellbeing? Or because they make massive commissions from flogging unit trusts? In Britain we pay an astonishing �59m every working day to unit trust managers and to the people who sold us those unit trusts. That’s �59m a day – �15bn a year – being taken from our savings and pocketed by other people. Unit trusts will make you very rich – but only if you’re a unit trust manager or salesperson. If you’re an ordinary saver, they’ll only make you poorer.

Let’s look at the figures. Say you put �10,000 into a unit trust. You immediately lose about 5% (�500) just for investing. Most of that goes in commission to salespeople. Then you lose about 3% (�300) a year in management and dealing costs. And when you withdraw your money, you lose another 5% (�500) because the price you sell your units is usually about 5% lower than the price you buy them. So, if you hold your units for five years, you generously give 25% (�2,500) of your money to multimillionaire managers and salespeople. (If you had �100,000, you’d be giving away �25,000 – �5,000 a year!) Of course, you hope the fund managers will make your money grow. But remember – 90% of unit trust managers FAIL to beat the overall performance of the markets where they put your money. And almost no unit trust managers ever beat the returns on cash. If you put your �10,000 into a fixed-interest deposit account, you’d get about 4% a year – over five years compounded that’s 21.5%. Due to their high charges, a unit trust would have to grow by 46.5% (9.3% a year) to beat a safe, no-risk cash deposit. Forget it.

Actually you have two rational�choices for your money. You could put it in�a longer-term 2 years+ fixed-interest deposit account. Or you could do what I tried – I looked at some of the most commonly recommended unit trusts, Googled them to see which were the main shares they held and then bought those shares directly myself reinvesting dividends in the same shares. At the same time as the unit trusts (which I so stupidly bought) lost thousands in fees, my shares went up,�a couple�by as much as 30%.

So please, please do NOT be conned into putting your savings into the grasping hands of multimillionaire unit trust managers and their unscrupulous, lying salespeople.