August 21, 2006

The easiest way to become a millionaire in Russia

When watching TV news. Reading newspaper, observing the situations happening in my daily life, I’m becoming more and more convinced about the easiest way to get rich fast and reliable in contemporary Russia.

No, this almost has nothing to do to be the president or at least CEO of one of oil or gas companies, or aluminum ones etc. No… despite all those things, to be a head of an oil companies is no so easy. Signing contracts, finding new markets (that is, where to ship those additional couple of million tons of ‘black gold’). Well, this all may cause a headache for an inexperienced CEO.

What if one has no experience, especially in the field of economics, marketing or MBA (I’m sure there few people in Russia who could answer what it stands for), but still wants to become a millionaire preferably in short-term period. Is there a way out? Is there a solution?

I’m 100% sure there is. Jus take over…. a governmental or municipal position. Why? Yes, I know, people working for government are not getting paid very well, especially in Russia (the average monthly salary in the range of $300 to $1000).

Of course, I’m not talking about low-level clerk, though even a regular clerk can built his career properly to earn good money, but this is the topic of one of my future posts.

Let’s assume you are at the position of deputy head of the educational department of one of little regions somewhere in the central Russia. You might ask how deputy head of the educational department can become rich when his salary is just, say, $500 a month. This mystery is what I’ll try to discover for you.

The road-map to becoming a millionaire is fairly simple and based on the events which seem to be unrelated from the first glance.

For example, recently under the presidential directive every school (even those ones situated in the center of frosty and dense Siberia) is to be equipped with so called ‘computer classes’. This is simply a room with a couple of dozens of PC (personal computers). For this purpose there is a special clause in the federal budget amounting for, say, $40 mln. That’s good news because educational departments all over Russia fall under that budget category.

That is that your department where you presumably work would get roughly $800 K. Well, not bad to start with. So what’s next? Oh, that’s easy – you go find a computers selling company (luckily, there are plenty of them. Better, if one of your relatives work there) and start estimating. Currently, a good PC’s system block with a Celeron processor having 2.5 GHz and 256 DDR SDRAM costs around $300. Plus add $250 for a mid-level 15-17 inches TFT monitor, plus accessories and, in total it would amount to roughly $600. Under you calculations there about 600 PC needed for your region. It would make $360 K. Great! Then you strike out the prices above and what we see is the system block price is $700 and LCD displays are now shipped at the price of $633 (special ‘discounted’ price for governmental bodies). Than you pay a certain percentage to the computer company (say, a couple of per cent), of course, you’ve got to pay at least half of your ‘profit’ to the head of your department and to the governor. Ok, it makes around $100K for your personal income for this operation (I let you make your own calculations based on what’s been said above). Clean work, no headache, no need to carry weights (except for bags with cash). And just to recall that this is only one of the governmental programs initiated by the government. There plenty of other social and useful programs targeted to improve people’s lives and develop economy. Ok, you got the hint, I presume.

So, it lets easily make a million annually including all those ‘kickbacks’ (‘rollbacks’) – everyone’s happy. Well, besides kids who have to learn Word, Excel etc sitting at those PC and harming their eyesight and putting up with slow computers. But who really cares?

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