New study looks at what Czech multi-millionaires are like

The typical Czech dollar millionaire is a man in his late 40s who runs his own company, is concerned about corruption and doesn’t show off his wealth. He does not take big risks with his money which he mostly spends on himself and his family. These are some of the results of the J&T Bank’s Wealth Report for 2012, a new survey of multimillionaires in the Czech Republic and Slovakia. In this edition of Marketplace, we talk to one of the authors of the study, Jaroslav Cír from the research firm Perfect Crowd.

Jaroslav Cír, photo: Czech Television

“We have found out that there are fewer differences between Czech and Slovak dollar millionaires than we expected. The group is quite homogeneous. We don’t have exact comparisons with Western Europe but what we know from other studies is that there might be more women among the affluent people while age-wise, it tends to be similar although rich people in the West could be even older.”

These people started their careers before the end of communism. Is this reflected in any way in the data that you collected?

“Not exactly. But I think that most of them were successful in shaking off the communist legacy quite pronouncedly. We can see it especially in their answers when asked about what they considered the biggest problems of the society nowadays. Unlike the general population, they did not talk about taxes and day-to-day problems but about lack of political leadership and vision.

“The report shows that these people are quite focused on their businesses and translate their business thinking into a wider perspective when thinking of the society and the state. That’s something the rest of us have not adopted; many people still believe the state will care for us.”

When it comes to their businesses and the source of their wealth, you found that about 60 percent of Czech dollar millionaires run their own firms. Do you also know what type of firms they are?

“We don’t really know all these details. One thing we have to be careful about in this study – and others – is to make sure that we don’t breach the privacy of the people involved. So we did not ask about this but it’s certainly interesting and we might include in our study next year.”

What you did ask about was how these people invest their money, and you discovered that Czechs tend to invest in riskier opportunities than Slovaks…

“That’s just a slight difference though. The general tendency is towards safer investments such as real estate and investments in their own companies and – which was really interesting – into themselves and their families, these closer circles of families and friends. But I think we cannot really talk about significant differences betweens Slovaks and Czechs in this respect.”

The study says that multimillionaires don’t care that much about brands with one exception – cars. Why do you think that is?

“Well, they are normal human beings and all of us, when it comes to brands, we care about brands that we show to others and cars are the ultimate brand because we unconsciously identify ourselves with it. So that was not very surprising but what we found more surprising was another issue – their lack of interest in self image. Their care for work and for family is much more pronounced than care for their-self image. We found out that a large number of them are what we call modest or down-to-earth people who don’t consciously show off their wealth but instead focus on putting it to work in terms of their companies.”

Speaking of cars, the survey suggests that Mercedes Benz is much more popular with rich Slovaks that it is with Czechs – why?

“The question we asked was, ‘which make of car do you consider a symbol of success’ rather than what kind of car you like or drive. When we saw the results we thought that Mercedes as a symbol of wealth is perhaps stronger in the East than in the West because it’s such a flashy, unequivocal symbol of success while towards the West, the choice is more fragmented. But we also learned from our Slovak colleagues that there is a very successful and well known Mercedes dealership in Slovakia which might have influenced the results.”

Are dollar millionaires politically involved? One would expect they would support right wing parties yet they are more optimistic about the EU than the general population and than the mainstream right-wing Czech party…

“The study did not focus on politics but as you said, it implies certain inclinations. One of the things it shows is that they are more knowledgeable and more practical about politics. They see the EU as an inevitable entity for the future. I already said that one of the key questions for us was about the most pressing issues of today’s society where they emphasized the lack of leadership much more than the general population. We can perhaps interpret as an inclination towards the centre-right. But politics is much less of an issue in fact; these people tend to have a managerial view of public affairs.”

One concern of these people was corruption yet as the daily Hospodářské noviny highlighted, other studies show that up to 25 percent of managers would give bribes to win public contracts. What does your survey say about moral values of these people?

“It’s hard to say. But in one of the questions, we asked about charity and NGOs, and it turns out that an absolute majority of these people are concerned about the non-profit sector and donate periodically to it. The specific issue of corruption is where they didn’t differ that much from the general public.”

How do find approaching these people? Are they willing to share their opinions?

Photo: Barbora Kmentová

“I don’t think it’s easy. I don’t think that is because they would want to make themselves look better than other people but I think their experience is that they have to protect their privacy. One of the interesting findings is that they much less on Facebook than regular people and they have much less need to share their personas. So they are not easy to approach; one has to win their trust and that was very important in the study. We approached them through their partners in the banks or related companies and after they realized how useful the study can be in de-mythicising that group of people, they were quite willing to share the details of their business and private lives with us.”