Where I'm putting my money in '96

OK, I CONFESS. While sniping at Lottery-doers over the past year, I have been quietly shovelling my savings into Premium Bonds, hoping to win that pounds 1m monthly prize. It has been one of my less successful investment strategies. My pounds 8,000 of bonds has won two prizes, pounds 50 each, a return of little more than 1 per cent. But had I plumped for the Lottery, even with average luck I would have lost most of any money I had staked.

In addition, with Premium Bonds the money I have put in is safe and is automatically re-entered in every draw. Who knows, next month's pounds 1m prize ... Meanwhile I'm going to resolve to be more realistic on the financial front in 1996.

No 1 resolution is to set up a monthly savings plan to invest in the high-growth economies of South-east Asia. Such plans are run by most companies offering unit trusts, PEPs and investment trusts, and deservemore attention.

Most of us invest in the stock market in one go, hoping to make money quickly and, of course, not to invest just before a crash. In practice this often means putting off investing and thus losing out by leaving the cash in the building society.

Over the longer term, shares should outperform building society accounts, and shares in high-growth countries should outperform those in the UK. Investing by direct debit I will hardly notice the reduction in income (we are talking only perhaps pounds 50 a month).

In fact, the more I forget I have the investments then, arguably, the better. I will not be tempted to cash the plan in. And part of the magic of saving regularly is that small sums can grow into sizeable amounts surprisingly quickly. Over the past five years, says the unit trust trade organisation, Autif, pounds 50 a month in the average South-east Asian unit trust would have grown to more than pounds 4,700, or over the past 10 years to more than pounds 15,000 That's twice as much as I'd have got from a building society after ten years, and 50 per cent more over five.

My other main resolution is to sort out my Super-Tax-Efficient-Early- Retirement-Off-Forever-Fund: Steer-Off forshort - I don't want to think of it as a pension, since then I won't do anything about it. With a personal Steer-Off, from the age of 50 I'll be able to take a tax-free lump sum of thousands, and/ or an income from the money I accumulate. Up-front income-tax relief on contributions will effectively reduce the cost, while direct debits and automatic deductions from salary can, again, work as financial painkillers.

Better still, many employers will contribute for you if you contribute yourself, even with personal Steer-Offs. All I have to do now is convert intentions into reality. Watch this space.