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J&T BANKA WEALTH REPORT: Survey of Czech and Slovak Dollar Millionaires

31. May 2016

How are wealthy Czechs and Slovaks facing the challenges of the world of finance? Where do they see opportunities and threats to their assets? Can the wave of immigrants that the media has been so focused on also be an opportunity to launch new business ventures or is it a precursor to a global conflict? What are they saying about the prospects for Western society, how do they see their future, what is posing a threaten to the assets they have worked to build and how do they intend to protect them? Become acquainted with the results of a unique study that, for the sixth year running, reveals how dollar millionaires see the challenges of today’s world and the state of our society.

Who are the dollar millionaires?

They are university graduates and business owners aged 50-51 years. They have not become rich over night: they have earned their wealth through the long-term development of their businesses. The world of dollar millionaires is predominantly a world of men. In the Czech Republic, 90% of dollar millionaires are men; in the Slovak Republic, this number is as high as 94%. A similar trend can be seen elsewhere in the world. The primary source of their assets is business (66%), investment (13%) and employment (13%). Inheritance is the primary source of wealth for 8% of Czech and Slovak millionaires. The typical millionaire respondents launched their businesses themselves in the 1990s and could not depend on inheritance or significant assistance from their parents, as is often the case in the developed world.

Dollar millionaires in the world of investment

For them, the priority is ever greater investment security. In both countries, they consider agricultural land a secure investment. In fact, in the Czech Republic, most respondents prefer it (41 %); in Slovakia, agricultural land tied with gold for seventh place (18%). To compare, in 2015 “only 34%” of respondents in the Czech Republic and 15% in Slovakia gave preference to agricultural land as an investment. Trends show that buyers do not plan to farm the land, nor do they wish to transform them into building lots. Their objective is to combine the land into larger units and then sell or lease these units. Investments in start-ups are seeing a growing tendency (by 2‒3% per year). In Slovakia, dollar millionaires most often named start-ups when asked where they expect the most interesting returns on their investment (27 %; 26% in the Czech Republic). An investment mainstay is building land (34% in the Czech Republic; 25% in Slovakia), where year-on-year growth was 8 % and 14%, respectively, and residential real estate (23% in the Czech Republic and 16% in Slovakia; in 2014, 22% in the Czech Republic and 8% in Slovakia). Of the all the commodities, gold is fairing the best: the survey showed a year-on-year increase in the Czech Republic from 3% to 16% and in Slovakia from 9% to 18%. One reason for this is the substantial drop in its price, which fell to under USD 1100 per troy ounce in mid 2015. The other reason is faith in gold as a liquid investment instrument, which is physically very easily to transport if the worst-case scenarios become reality (Russian military intervention, migration crisis, and so on).

What does the investment portfolio of dollar millionaires look like?       

Despite the marked drop in interest rates, dollar millionaires have one thing clear: they would like an annual return on their investment of at least 4 to 5%. Term deposits have not been able to provide such returns for quite some time now; therefore, dollar millionaires are looking elsewhere. It is no surprise that in 2016, cash constituted only 16% of the investment portfolio of Czech and Slovak millionaires. In the Czech Republic, portfolios have begun to comprise real estate (27 %), shares (23 %) and bonds together with promissory notes (21%). In Slovakia, bond and promissory notes constitute up to a third (33%) of a portfolio, following by real estate at 26%. Shares or business interests in companies take up much less (14%) of the portfolios of Slovaks than those of Czechs (23 %).   Generally speaking, the trend in investing is portfolio diversification, willingness to try more modern forms of investment, greater openness to society and, thereby, growing interest in philanthropy, and the demand for more liquid investment that can quickly be converted to cash if need be.

Dollar millionaires and the economy

For the second year running, both Czech and Slovak dollar millionaires see the current economic situation more as an opportunity than a threat for their investments (in the Slovak Republic the improvement is somewhat greater). The positive mood from 2014 grew slightly last year and a further improvement is expected along with new investment opportunities. Compared with the rest of the population, it has again been shown that dollar millionaires are always a bit more optimistic about current economic developments.

Both Czech (27%) and Slovak (43%) dollar millionaires agree on one thing: they expect growth in the filed of IT services. After that their opinions vary substantially. In the Czech Republic, respondents believe most in nanotechnology (34%), biotechnology (30%) and social services, which they trust much more now than in the past (in 2013, growth in this area was expected at 13 % and in 2016 it was already as high as 29%). In Slovakia, respondents see the greatest prospects in the automobile industry (57%). It appears that the reason for the growth is direct foreign investment (in 2015, British manufacturer of luxury automobiles Jaguar Land Rover signed an investment agreement with the Slovak government based on which the automobile manufacturer would invest GBP 1.1 billion and employ 2800 people in the new plant near Nitra). Even though Slovaks anticipated growth in the entire automobile industry (Jaguar Land Rover is already the fourth automobile manufacturer to build a plant in the country), they are not investing in this area, nor are they planning to invest, as they are aware that it would be difficult to do acquire direct access to major car manufacturers.  Just for comparison: in 2013 only 13% of respondents expected growth.

Slovak respondents also expect growth in the field of tourism (34%; in 2013 it was 11%), where they are expecting to see tourists abandon the “south seas” because of safety fears and seek other destinations. In both countries, dollar millionaires expect less growth in the field of energy than three years ago (in 2013, 29% in the Czech Republic, 49% in Slovakia; in 2015, 8% in the Czech Republic, 14% in Slovakia).    


The survey, which took place between February and March 2016, was conducted by J&T Banka in cooperation with Perfect Crowd. The objective of the survey was to map the investment behaviour and lifestyle of dollar millionaires, i.e., individuals whose available funds are worth at least USD 1 million (CZK 24.1 million or EUR 891 000). A total of 239 respondents from the ranks of dollar millionaires (160 Czechs and 79 Slovaks) took part in the survey. The data was collected through an on-line questionnaire. In-depth interviews with six respondents and discussions with the private bankers of J&T Banka supplemented the qualitative view.