Flocking to The Birdcage

When it came to entertaining in The Birdcage during Melbourne’s famed horse racing season, less was once more. Then the corporates arrived – and in going upscale, it all went downhill. Last year’s Mumm marquee incorporated a swimming pool. Photo: Kristoffer Paulsen

When it came to entertaining in The Birdcage during Melbourne’s famed horse racing season, less was once more. Then the corporates arrived – and in going upscale, it all went downhill.

???Oh yes oh yes oh yes, that season is upon us once more. Of air-kisses and evil eyes and side-eyes and side-boob. Of the fragrance from those famous Flemington roses wafting up gin-blossom noses, of celebrity chefs cooking artisanal morsels and bearded bartenders mixing fizzy cocktails for those in top hats and tails.

Of the bourgeoisie mixing with the cashed-up bogans, and of marvellous millinery atop fine frockery. Of tents with Moulin Rouge dancers, Arabian dancers and Schuhplattler slap-dancers, of dance music and hot DJs but (by contractual agreement) not David Jones. Of sponsorship spats and door bitches and thinkfluencers and – depending on the weather – either designer-suit sweat stains and melting make-up, or muddied heels and blinging in the rain. And, of course, the main point but perhaps a little beside the point, the greatest – and richest – two-mile handicap in the world of thoroughbred racing!

And the place to be – to see this decadent scene while being seen – is The Birdcage, a premium enclosure for luxurious sponsored marquees, which sits just next to Flemington Racecourse’s Parade Ring and not far from the on-course helipad.

Through November, for the Victorian Racing Club’s Melbourne Cup Carnival, this little patch of private land, measuring 17,000 square metres, is reached by one of three security checkpoints – before additional iPad (n??e clipboard) entry into one of 28 purpose-built parties. An enticing vehicle for corporate promotion and self-promotion, for confection and celebration, The Birdcage has become part of the fabric of our spring – but this latest and lavish incarnation is a relatively modern phenomenon. It was not always this way.

The Birdcage was born in the 1880s. In a common act of grovelling colonial linguistics, the actual term “Birdcage” aped that of the saddling paddock at Newmarket Racecourse in England. It was a spatial barrier between horses and spectators, and indeed its early “exclusivity” was based on a small fee designed to deter large numbers of the latter from spooking the former.

By the 1950s, the area had come to encompass the Victorian Racing Club’s nearby car park, increasingly popular as a picnic spot, and so the VRC seized on that opportunity to create “reserved” spaces that they might sell to members. The Australian Women’s Weekly started sending snappers to document all that old-world splendour on the grass, while business barons and wealthy graziers snacked on chicken sandwiches pulled from the boot of the Rolls-Royce, reaching for champagne flutes balanced on Range Rover tailgates.

By the 1980s, the area was fully fenced and policed. In 1985, the race that stops a nation was sponsored for the first time, becoming the Foster’s Melbourne Cup. “Then the corporates really started getting involved,” says racing historian Andrew Lemon. “You used to invite a few sponsors into the VRC committee room, but once you started getting multiple sponsors the challenge was, ‘Where do you put them all?'”

Lloyd Williams – the Melbourne-based property developer and racehorse owner now worth $784 million – had a thought. Why not reserve four adjacent car spots, and erect a little tent? He did, and others saw, and it did not take long for the idea to spread. “That’s when The Birdcage got this amazing feel about it,” says catering giant Peter Rowland. “Everyone used to stand out on the little road between them [the tents]. It was like a big cocktail party, and they would wander in and out of everyone’s tents.”

A good idea is a saleable idea, of course, so in 1986 the first corporate marquees were established. Deeta Colvin, a long-time premium brand strategist, set one up for her client at the time, Louis Vuitton. “Single-storey, fresh flowers, antique furniture,” she says. “Beautiful bar, great food. Simple, elegant – like a very upmarket picnic races. The guest list went from the PM to the top CEOs and chairmen, and our French visitors. It was the AAA-list – a very sought-after ticket.” Colvin ran the show there for 12 years and watched as more and more companies replicated her feat: some well, others poorly. “We set the scene. Little did we know what would happen,” she says. “They jammed marquee on top of marquee. You don’t even see a blade of grass anymore.”

The “tents” began to incorporate dance floors, private rooms and chandeliers. Long before chefs such as Attica’s Ben Shewry and Maha’s Shane Delia began creating degustation feasts for hungry racegoers, the late and disgraced entrepreneur Christopher Skase ran the first sit-down lunch: roast crispy-skinned duck and Grand Marnier souffl??s, for 80 people.

And so it went. “We had a fantastic decade,” says Colvin, “but the dynamic and target audience totally changed. For our clients, we felt, sadly, it was time to go. For our last one we just served Krug and caviar on the lawn, then we left.”

That was two decades ago. The growth since that time has been stunning. Setting the trajectory was a little-known airline, arriving with sheikhs and mystique and dollars from Dubai. Judy Romano, the Melbourne PR queen and “matriarch of The Birdcage”, handled the Emirates account when it landed in racing in the late 1990s. She was, in fact, the person responsible for (quite literally) taking the tents to another level. “The first year Emirates did a marquee, they were at the back of The Birdcage, with no view at all of the race,” she says. “But I stood up on the bumper bar of my car, and I realised if we elevated the marquee 1?? metres, we could see the track.”

They did so, and next they moved a fraction closer to the track, on a plot of a land that the late socialite Lillian Frank dubbed “Millionaires’ Row”. Then the arms race truly began, almost as if someone had fired a starting pistol, or opened the gates and screamed, “On your marquees, get set, grow!” The structures became “pavilions” and the strip became a “precinct”.

The marquees began hiring the best architects and taste makers to construct their canvas wonderlands, whether Mim Design or Joost Bakker, Matt Martino or Hecker Guthrie. They created pop-ups within pop tents, and began giving their spaces narrative titles like “A journey of the senses”. The physical one-upmanship, however, started with a humble dunny. “It really did begin with Emirates getting plumbed-in toilets,” says Romano, who now handles the Myer marquee. “The media could not get enough of that.”

Motorola was the first to build a two-storey structure. Lexus then created a third-storey rooftop area. Pernod Ricard’s Mumm had cancan dancers, then a pool. As one insider notes, “It’s like a bike peloton: someone steps back while someone else steps up, pedals hard and takes over. But really, we’re all sprinting.”

The pace, however, is not always easy to maintain. The Birdcage is nothing if not a kind of bellwether reflection of the nation, or at least its coffers. As one writer put it, “If there is a barometer of how well corporate Australia is travelling, it’s a small patch of land just up the main straight from Flemington’s grandstand.” Tales of excess abound. In one marquee, guests inhaled four kilograms of Beluga caviar in four days. Last year, a host shipped in three cases of Penfolds 2012 Grange, so that its 250 guests could enjoy a glass during the big race.

If such consumption represents the zenith, then the global financial crisis was surely the nadir. Pre-GFC in 2007, for instance, The Birdcage held 53 marquees. Post-GFC in 2009, only 34 were left. (In 2008, the Packer family famously withdrew their Ellerston Capital marquee at the last minute, leaving the VRC to hastily erect a temporary fountain in its place.)

There are 28 marquees this year, but that low number is no longer a reflection of belt-tightening, for they’re now more grand than ever: The Birdcage today is built to hold more than 4000 people on each of the big four race days during the carnival. “People say, ‘My God, they’re building houses here!'” says PR queen Romano. “But it’s still cheaper per head to have a good Flemington marquee than to host people in the Paddock Club at the Grand Prix.”

And the guests at Flemington can remain in the space you create – in the thrall of your brand – unlike, say, the Australian Open, where they must totter from their tent into the arena to watch forehands and unforced errors for hours on end. “In The Birdcage you’ve got four days – eight hours each day – to entertain your clients. It’s powerful stuff,” says Romano.

That said, guests can be fickle – hopping from marquee to marquee depending on the invitations they gather. Some come only for that peak moment on the card, neither showing up for Race 1 nor sticking around for Race 10.

Investment in a marquee is a sizeable expense. It has been reported, for instance, that in 2011 Emirates spent roughly $1500 per guest. With 250 guests per day over four days of racing, the total cost was around $1.5 million. Not only that, but to get a marquee on the front row, a brand basically needs to sponsor a race, costing more money again but also tying in with various contra deals.

Naturally, this spend demands a measurable return. Valentina Jovanoska currently runs the Sensis Digital marquee, but she was first involved in racing decades ago, running the Fairfax Media marquee, which was admittedly little more than a tent, tables, chairs and an open bar. “There wasn’t a lot of pressure on you for return, or exposure. It was just a way to thank advertisers for their spend,” she says. “Gone are the days when CEOs just put these on because they enjoyed racing. Now, you need ‘times-five return’ overall to warrant the investment.”

Emirates, for instance, is stepping aside. The airline has seemingly drained all the exposure it needs from the carnival and so this year will be its last as principal naming rights sponsor of the Melbourne Cup. Hilton had its final marquee in 2015, and Crown Casino has withdrawn as the key sponsor on Oaks Day.

The Emirates marquee in 2015. Photo: Eddie Jim

The vitamin giant Swisse had a marquee for a handful of years, but left last year to focus on a 2016 Olympics campaign. Sarah Chibnall, communications director for the company, well remembers what it was like trying to maximise the space. “Oh dear, the panic that starts to set in when there’s two weeks left,” she says, laughing. “I do miss it – so much – because there’s nothing quite like The Birdcage. But it’s also nice not to be preparing for that onslaught.”

She says the company got involved because, simply, stepping into The ‘Cage makes an organisational statement: we are bold and strong – maybe even sexy.

The celebration also becomes part of a “360 model” of publicity, working with other brands and PR campaigns to ensure maximum awareness and exposure. “Honestly, it just brings everything and everyone together,” Chibnall says. “For stakeholder relations, The Birdcage is one of the strongest returns you can get. I talk to suppliers and manufacturers all the time, and they still talk about their time at the races. It creates a lifelong connection.”

But the experience is not all roses. It can be a thorny patch, too, with inevitable territorial pissings. A 2015 branding spat, for instance, led to a national anthem no-show by singer Jessica Mauboy. One of the key sponsors of the carnival is Myer, and Mauboy was wearing a pair of shoes – tsk, tsk – from a “banned” brand.

It was not the only sponsorship row that year. A photo of the Cup being held by US actor Hilary Swank was vetoed – because the Hollywood star was wearing an outfit by Christopher Esber, which is stocked by David Jones, direct competitor of major sponsor Myer. (That same day, a photo with model Ashley Hart was blocked for the same reason, this time because of a Dolce & Gabbana outfit sold at DJs.) One fashion industry insider, speaking to The Age, summed up the at times farcical situation: “I do wonder if Donatella Versace came to the races, would the VRC make her wear a Wayne Cooper frock?”

Actor Hilary Swank at Derby Day in 2015. Photo: Eddie Jim

The attracting, pampering and promoting of celebrities is, of course, a Birdcage tradition. Jovanoska lays claim to one of the first “major” celebs to grace the track – but it wasn’t an actor, or a royal, or a pollie. It was Calvin Cordozar Broadus jnr, otherwise known as Snoop Dogg. She had to ask the dapper rapper to a buy a suit, as he doesn’t ordinarily wear one, and the VRC is infamously inflexible on such matters. “He came in with his entourage, and the party vibe went up 100 per cent. I remember The Birdcage being gridlocked entirely, just because he had arrived.”

The trackside arrival of the megastars, however, created a competitive challenge for all involved – a new rod for the back of every party planner. If a marquee is erected and it doesn’t have at least one Nicole Kidman or Kate Upton – a solitary Chris Hemsworth or Usain Bolt – did it really happen? And was it really that happening? Can your soir??e be said to have celebrated sport without Ricky Ponting or Lleyton Hewitt? Can a venue claim a seat at the power table without a politician such as Julie Bishop or Bill Shorten, and a billionaire like Gina Rinehart or James Packer?

A case could be made that the best guest lists once prioritised people at the top of their game, and presented a sincere opportunity for networking, rather than an easy grab for attention. Has the calibre of guest slipped? Perhaps. After all, remember who came to the track back in 1985? Charles and Diana. “Once you had actual royalty,” says one former host. “Now it’s dropped down to soapie stars and people chasing social media blindly. It’s Kardashian culture.”

The trick is in keeping the mixture of guests fresh and diverse and lively. You obviously want an array of beauties and bachelors???but perhaps a limited number of stars from The Bachelor. As one organiser notes, the famous folk are there to attract attention: “And journalists get sick of people who’ll go to the opening of a wound.”

The Emirates marquee in 2012. Photo: Angela Wylie

In recent years, a crucial cross-section of invitees – beyond the A-listers and B-listers and also-rans – are the Insta-famous. Last year, for instance, the “Fashions on the Field” ambassador was Stephanie Smith, a woman best known for having 1.2 million Instagram followers. Traditional media is still a key target, but the instantaneous buzz of social media is now almost as fruitful. “Once upon a time, you would get a few snaps of famous guests in front of a media wall, and you would cross your fingers it was in the paper the next day,” says Jovanoska. “That won’t fly anymore.”

Built into the front facade of the tech-heavy Sensis Digital marquee, for instance, is a vast LED screen, which streams pixelated footage and social media from within. On site, a “digital lab” with video crews, photographers and editors produces and disseminates moments on the run. Last year on Derby Day, Sensis had close to 2.4 million impressions on social media throughout the day.

All of which, of course, sends the excitement and exclusivity of The Birdcage experience out into the ether, which is the general point of the enclosure now. The Birdcage, after all, is not really about racing but rather the party. True racing fans almost never set foot in its confines, for it is a carnivalesque, burlesque scene – one that has been captured in words before.

“Along with the politicians, society belles and local captains of commerce, every half-mad dingbat who ever had any pretensions to anything at all???will show up there to get strutting drunk and slap a lot of backs and generally make himself obvious???Nobody minds being stared at; that’s what they’re in there for.”

Familiar as that might sound, this passage was not written about the Melbourne Cup, nor specifically the hermetic, wristband-only world of glitz and glamour that is The Birdcage. They are in fact the words of gonzo journalist Hunter S. Thompson, from 1970, and were written about an entirely different but strikingly similar race in a famous piece of journalism called “The Kentucky Derby is Decadent and Depraved.”

Thompson wrote of the masses he saw in Louisville, guzzling mint juleps and vomiting on their shoes, but also the bourbon-stained gentry glad-handing and swaying in the sunshine, and perhaps how, taken together, it all stood as some signifier of a doomed atavistic culture.

Some of our own harsher cultural commentators believe the Spring Racing Carnival is an Antipodean version of the same thing. A bunch of billionaires watching horses get whipped for fun, or at least boozy barbarians getting ripped in the first warm breath of spring. One only need watch the simultaneously well-dressed yet dishevelled masses pouring forth from train carriages on their way home from the Caulfield Cup or the Cox Plate to imagine how big and messy it will all become by the end of today – Derby Day – and then Cup Day, and then Oaks Day, and then Stakes Day.

But there is also a more forgiving view of the epicentre of our tarpaulin celebration. A different writer, and a better one – Mark Twain, in fact – visited the Melbourne Cup in 1895, and he had his own impression of the bright pageantry and the muscled thoroughbreds, of a race that brings the swarming multitudes together, and an excitement that is kept at “white heat”. Twain’s observations are now 122 years old, but could have been made this week.

“Their clothes have been ordered long ago, at unlimited cost, and without bounds as to beauty and magnificence, and have been kept in concealment until now, for unto this day are they consecrate.”

The day, and indeed the entire racing season – and specifically the biggest party therein – may have shifted of late from prestige to something broader, something closer to “masstige” – but perhaps it was always as such, and what could be wrong with that? Take the words of Twain, again: “And so the grandstands make a brilliant and wonderful spectacle, a delirium of colour, a vision of beauty. The champagne flows, and everybody is vivacious, excited, happy…”

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Hard-working Davis in milestone match

CONSISTENT: Newcastle Jets player Cassidy Davis will play her 50th W-League match for the club on Saturday. Picture: Max Mason-HubersDesire and the right attitude go a long way.

Craig Deans

They are two qualities that have made Cassidy Davis invaluable to the Newcastle Jets W-League squad.

Her sporting career started as a netballer but after changing focus to football when she was 12the now 23-year-old is poised to become just the third player to make her 50thW-League appearance for the Jets. She joins Gema Simon and Tara Andrews.

The home-grown midfielder-cum-defender will mark the milestone in front of a home crowd when the Jets host Sydney FC at McDonald Jones Stadium on Saturday, but getting three points is her main focus.

“I think last year we struggled to win at home so that’s something we have to improve on,” Davis said.

“We’ve started off strong against Wanderers, so if we can get three points again this weekend it’s looking good.”

Davis signed with the Jets in 2013 and has made the most of her opportunities.

“I was a sub my first season then I was fortunate enough to get a starting spot from an injury and from there I’ve started every game, but it’s still a work in progress,” Davis said.

Last year she was “shocked” to be named Jets W-League player of the year, but it was no surprise to coach Craig Deans.

“When I came into the job I inherited the squad from the year before and wanted to give them all a chance to show me what they had,” Deans said.

“It was evident from the start that Cass had a great work ethic and had the right attitude and the right drive and desire to be the best footballer that she could be.”

She joined the Jets as a midfielder but last year found herself directing the defence atcentre-back in a season where Deans said “she went to another level”.

“She’s a good example of how the rewards are there if you work hardand are dedicated to your sport,” Deans said.

“It’s important for our academy teams to have people like Cass who they can look at and see that there’s a pathway through the academy into the W-League if you do have the right attitude and work ethic and enough ability.”

The Jets showed some encouraging signs in a 2-1 win over Western Sydney last weekend.

“The good thing is we’re probably at about 60 per cent of where we hopefully will be and we still managed to get a result, so we just need to see an improvement every week,” he said.

Cortnee Vine, Sophie Nenadovic and Clare Wheeler are back from Young Matildas duties to give Deans a full complement to choose from.

The match is at 5pm.

Being authentic at work helps you earn more

As the same-sex marriage survey draws to a close in Australia, there has been an uncommon blurring of the line between personal and professional.

Numerous companies have broken with the traditional reluctance to take sides on social and political issues and openly supported the “yes” campaign. These include Airbnb, Amazon, ASX, Atlassian, Bonds, Commonwealth Bank of Australia, Finder, Foxtel, Kmart, McDonald’s, NRL, Origin, Qantas, Salesforce, Seek, Twitter, Visa, and Xero.

In addition, a number of senior executives have shared their personal stories and experiences on the same-sex marriage issue. One of the strong common themes to emerge is the recognition that the ability to be your authentic self at work allows you to perform better and be more successful.

For example, early in her career Skipp Williamson felt that she did not quite fit in as a gay woman in management consulting. This was the catalyst to start her own now hugely successful firm, Partners in Performance.

Annette Kimmitt, global growth markets leader and Asia-Pacific accounts leader at EY found that her professional confidence and work performance blossomed as she became comfortable integrating her personal and professional personas. Her recent blog post about the impact of marriage equality on her family has gone viral.

Romilly Madew, chief executive of the Green Building Council of Australia and Dr Rory Nathan, Associate Professor of hydrology and water resources at University of Melbourne, have both recently articulated the benefits for organisations in creating workplaces that are inclusive and accepting of diversity.

From a personal finance perspective, the ability to share who you really are at work not only helps you earn more, but also to spend less, in the following ways. Building trust

When you are relaxed and being yourself, others can feel it. It helps clients, co-workers and superiors feel that they can trust you, when they get the sense that you are genuine and at ease. Trust is an essential ingredient for successful relationships and is the hallmark of many successful managers and sales people. Being authentic at work accelerates the development of trust and greater responsibility, reward and recognition often follow. Reducing fatigue

A Deloitte study found that nearly half of all workers have felt a need to “cover” or hide aspects of themselves at work. Only 45 per cent of white men have felt this way, while two out of three women have experienced this need and more than four out of five LGBT workers.

It requires much more energy to maintain a created persona than to be yourself. Words and actions at work that do not align with your true thoughts and feelings create cognitive dissonance, that is uncomfortable and tiring. Being authentic releases mental and emotional energy to be devoted to your work and undoubtedly enhances performance. More interesting work

If people in your workplace genuinely understand what motivates you, you are more likely to find yourself working on projects and assignments that really interest and excite you. We all perform better when we are working on something we find truly engaging. Enhancing team performance

Studies have shown that diverse teams outperform financially. McKinsey research suggests that companies with ethnically diverse teams outperform their peers by up to 35 per cent. This financial performance is the result of superior problem solving, creativity and innovation from diverse groups. Being authentic enables you to contribute more effectively to the team for everyone’s benefit. Reducing expenditure

If you are happy and accepted for who you really are, you are much less likely to use money to impress people or overspend to compensate for being miserable at work.

Spending to maintain an idealised lifestyle or to project an image can be a vicious circle. The more you spend trying to sustain the illusion, the more likely you are to be trapped in a job you don’t enjoy or working longer hours than you would like.

Regardless of your personal views on marriage equality, it’s clear that being your true self, and allowing others to do the same, has both social and financial benefits.

Catherine Robson is an award-winning financial planner and host of weekly business podcast Success Stories Twitter:@CatherineAtAff

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Before and after: How this kitchen went from derelict to dreamy

Melissa Bonney, owner and principal of The Designory, loves a renovation challenge. “The more derelict the house, the better,” she says, “You can create something really special out of the ashes.”

It was no surprise, then, when Bonney and her partner, builder Brendon Bott, bought Ayana House, a run-down early 1900s home, late last year.

Its beachy location of Kingsford, Bonney says, informed the renovation’s overarching concept. “Creating a well-functioning family home is always our focus, but, given the location, we wanted it to be luxurious, resort-style. This time, we designed a home for us to stay in.”

Top of her to-do list was the kitchen. “We love entertaining and it’s my favourite room,” she says. “This was the tenth kitchen I have designed for myself. It had to be amazing.” Before

As it stood, the current site of Bonney’s dream kitchen was a series of five rooms. “Because the house has a second storey, we could do the build as a compliant development. It fast-tracked the process.”

Their aim to complete the project and move in by April 2017 was a realistic one. “We knew we could move some inner walls and make quick clever changes to bring about major benefits,” she says.

As two professionals building their own modern retreat, the couple revelled in their creative freedom. “We wanted high-end finishes,” she says. “Because it is our house, we could experiment and do some interesting things.” Related: The most common kitchen renovation questionsRelated: The magic ingredient within good kitchen designRelated: The women behind Australia’s incredible kitchensThe renovation

First step was to de-compartmentalise the existing layout. “It was dark,” she says, “so we moved walls to open up the back. It allowed natural light to pour in.”

The couple are consistently drawn to natural materials. “Especially solid timber,” she says. “It isn’t something you use a lot in client’s projects because it’s a live thing that can change over time. And it’s expensive.”

Bonney chose to utilise repetitive colours and materials for cohesion throughout. “The palette is simple and almost devoid of colour – just lots of white and grey,” she says. “It encourages light and allows the timber to sing.”

For a sense of spaciousness, 100 square metres of white epoxy flooring was laid throughout. “It is much harder than concrete,” she says. “It’s white but very easy to clean, and light literally bounces off it.”

As an avid cook and entertainer, Bonney’s aim was to install everything she could ever need in one kitchen – starting with an oversized tonal grey granite island bench. “When we saw the slab, we had to have it,” she says.

A wall of rich, black American walnut joinery conceals an integrated fridge, black glass double-ovens, microwave combination oven and coffee machine, as well as a walk-in pantry and vast appliance storage.

“I like to hide everyday clutter,” says Bonney. “It means counter tops are clear but all your essentials are within easy reach.”

The kitchen’s back elevation is equally well stocked with two dishwashers, to accommodate the family’s love of entertaining.

Hovering over a chic white sink is a tap dispensing boiling, sparkled and chilled water, along with a set of beautiful matte white tapware.

Overhead, a white elevation is installed with custom-designed timber shelves. “They house treasured pieces, plants and cook books,” she says. “It means they are close at hand, but don’t clutter or compromise the space aesthetically.”

A cavity slider separates the front of the house from the rear open-plan living areas. When open, the slider reveals nearby rooms and connects with ease to the back patio, garden and pool.

“You are immersed in one large open-plan space, filled with light and comprising the dining and living areas, and of course the hub: my kitchen,” she says. “It is the ultimate family and lifestyle space. I love it when a plan comes together.”

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Overcome a fear of shares with index funds

If you want to build a substantial portfolio, you need to seek the best return that fits your risk profile. Picking the right assets is critical: for most people, it comes down to choosing between cash, property and shares.

Each investment choice has its advantages and disadvantages, and I have long stressed the advantage of diversification. However, it’s important when making any investment decisions to understand the differences.

Let’s start with cash. Certainly, cash in the bank may give you the feeling that you have a risk-free investment, but cash is the riskiest investment in the long-term. There is no chance of capital gain, which means your money is being eroded every year by inflation, and there are no tax concessions on the income.

Many investors like the perceived security of bricks and mortar, which is why property is such a popular investment in Australia, but you need a large chunk of money to get started, and you may still need to borrow as much as half a million dollars. And property can lose its gloss for retirees as their ageing properties require increasing maintenance and become harder to rent. But the worst aspect is the lack of liquidity – if you need money in a hurry you have to sell the entire property because you can’t cash in the back bedroom. Selling can take months and often triggers a large capital gains tax bill, which can take a big chunk of your capital.

This gets us back to shares, which have long been my favourite. However, many people are terrified of shares. I hear things like “playing the share market is risky”, “I bought some shares once and lost all my money”, or “I really have no idea what company I should invest in”.

Well, it doesn’t have to be like that. Today I will tell you about a little-known investment that has a proven track record of better than 8 per cent a year over the past 30 years, which cannot go broke, has unique advantages of liquidity and tax-advantaged income, and takes no skill whatsoever on the part of the investor. I am talking about index funds, which simply rise and fall in line with the index.

Index funds are designed to cover shares from all of the companies listed on a particular index.One of the most common types is the exchange-traded fund (ETF).

Because they are designed to track the market, index funds will follow the market up and down. So, if you are watching the nightly news, and are told that the All Ordinaries is down 1 per cent on the day, your investment in that index fund will be down by the same amount.

It is also possible to buy international index funds, which cover a wide range of overseas markets, but I believe for international investments it is better to go through a top fund manager. Remember, our share market is less than 2 per cent of world markets, which means there are a multitude of companies, and indices, to choose from when you are investing internationally.

One of the best things about investing through index funds is that the data is readily available, and you do not have to make any specific share decisions. Just choose an index fund that matches your goals and you automatically become a part-owner of every share that forms part of the index.

If you want to see how well the All Ordinaries Accumulation (which includes income and growth) has performed, just go to my website 梧桐夜网noelwhittaker南京夜网419论坛. Under Calculators, click Stock Market Calculator. This enables you to enter your choice of starting and finishing dates between January 1980 and September 2017 and enter a theoretical sum to invest. The calculator will tell you how much you would have had if your portfolio matched that timeframe.

It’s always interesting to enter the date you bought a property and the price paid, and compare what you would have had if you had made that investment in an index fund instead.

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: [email protected]南京夜网419论坛

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