Financial Literacy and Its Influence on Investment Decision-Making among Young Professionals

Abstract

Financial literacy has come to be a necessary skill in the current complicated financial world, especially to young professionals who have increasingly become accountable in making independent investment decisions. Lack of financial literacy usually prompts poor financial planning and inefficient investment decisions, which is why it is significant to learn how financial literacy impacts investment behavior. The purpose of the study is to investigate the effect of financial literacy on the investment decision-making processes among young professionals. The quantitative method of research was chosen based on structured questionnaire that was given to participants aged 22- 35. The analysed data were then analysed by use of descriptive statistics, reliability testing, correlation analysis, and multiple linear regression analysis to ascertain the relationship between financial literacy and investment decisions. The results show that there is a positive and statistically significant relationship between financial literacy and investment decision making. According to the results of the regression, financial literacy is a significant predictor of investment behavior and thus a person with a high level of financial literacy stands a high chance of making informed and rational investment choices. The research concludes that financial literacy may be improved to better the quality of investment decision-making among young professionals. These results emphasize the importance of efficient financial education programs and policy-makers initiatives to enhance financial awareness and help to improve investment practices.