Final Word from Wednesday, August 15, 2007

What does it take to be considered rich? It's all relative, but Forbes magazine has a clear definition. Anyone with $1m in annual passive income is rich. That means a million bucks per year without working. Total investable assets - not counting home, yacht or Ferrari - would have to be at least $25-30m to produce passive income of this level. Even if we were very generous and converted this to crowns at a one-to-one rate, a Czech would still need investable assets of at least Kč 25-30m - or monthly passive income of about Kč 80,000 - to be "rich." Is a Czech with Kč 80,000 in passive income truly rich? Most ČSSD voters would probably think so. But wait a minute! MP David Rath of ČSSD is labeling people with Kč 80,000 in employment income as rich. After paying income tax and social taxes, that leaves them with something like Kč 50,000. That's barely enough to pay the running costs of a Ferrari.[Czech Republic]


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