AN ANALYSIS OF INCOME AND INVESTMENT PATTERN OF WORKING WOMEN IN THE CITY OF AHMEDABAD

Transcription

1 AN ANALYSIS OF INCOME AND INVESTMENT PATTERN OF WORKING WOMEN IN THE CITY OF AHMEDABAD Prepared By: Rajeshwari Jain [pursuing PhD] Faculty, ISMS, Bangalore, Near Raghuvanahalli bus stand Kanakpura Main Road, Bangalore Contact: , Residential Address E702, Golden magic, Brigade gardenia, Near RBI layout J.P Nagar, Phase 7 Bangalore Mb: rajeshwari_raj@rediffmail.com 1

2 ABSTRACT The research study is based on the analysis of income and investment pattern of the respondents i.e. working women in the city of Ahmedabad.The objective of the study was to determine the relationship between the income and investments pattern among respondents. The study was conducted on working women across both government and private sectors in the city of Ahmedabad. The data was collected by distributing a structured questionnaire to 250 respondents. It has been found that majority of them preferred to invest their savings in fixed deposits with banks for the safety of a volatile future followed by investing in gold. The major impact on savings is due to the level of income which has considerably increased in the last decade. Keywords: Annual income, Annual savings, Investment, working women, government and private sector INTRODUCTION What is income? Income is the consumption and savings opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings received... in a given period of time. It also means, money or other forms of payment (received periodically or regularly) from commerce, employment, endowment, investment, royalties, etc. What is investment? In finance, the purchase of a financial product or other item of value with an expectation of favorable future returns. In general terms, investment means the use money in the hope of making more money. It also means money committed or property acquired for future income. There are basically two main classes of investment (1) Fixed income investment such as bonds, fixed deposits, preference shares, and (2) Variable income investment such as business ownership (equities), or property ownership. In economics, investment means creation of capital or goods capable of producing other goods or services. Expenditure on education and health is recognized as an investment in human capital. Defining women s work and income and investment Women s income is always considered as a supplementary income within the family. Usually women s work/domestic work is included in the nonproductive category in the earlier censuses showing that other categories are supposed to be reproductive. It is universally considered as, women and children in the family are consumers, not producers. (U.Kalpagam, Labor and Gender, 1994). But the growing importance of income earned by women raises many interesting issues worth serious consideration. First, it is related to the share in the total household income. Second is related to their control over the expenditure of the total household income that means who took decisions and what are the decisions etc. Third is, after spending a considerable amount of earnings, what are the investment tools opted by women to save their earnings. During this survey, it was found that respondents were highly educated, typically 139

3 employed, and almost all have savings and assets. The economic crisis has heightened women s recognition of the need to develop a financial plan that will meet long-term financial goals. Women are more involved than ever in their households investment and financial decision making. Among the survey respondents, 95% of women were involved in financial decision-making in their households, and one-fourth was the primary decisionmakers. Married women played a key role in the financial decisions of their households as well. While most decisions were made jointly, 84% say they were involved in their household s financial decisions. RESEARCH METHODOLOGY RESEARCH PROBLEM Problem formulation is the first step in the research process. It is carried out to identify factors for which research is to be carried out. A problem should neither be defined too broadly nor too narrowly. So the research problem here is: An analysis of income and investment pattern of working women in the city of Ahmedabad. OBJECTIVE OF THE STUDY To find out the awareness level and the main preferred tools of investment by the respondents To find out their objectives behind investment in various tools To find out who influence/help the respondents in making the choice of investment tools To find out the frequency of investment SAMPLE DESIGN: A Sample Design is a definite plan for obtaining a sample from a given population. It refers to the technique to the procedure adopted in selecting items for the sampling designs. THE SAMPLE SIZE AND COLLECTION PROCESS The study is based on a convenience sample of 250 working women professionals in the city of Ahmedabad. 250 self-administered questionnaires were administered on the participants and they were briefed about the purpose of the study, and given enough time to fill out the questionnaire SAMPLING METHOD: Non-probability sampling method: Convenience Sampling DATA COLLECTION The study was conducted by the means of personal interview with respondents and the information given by them were directly entered in the questionnaire. COLLECTION TECHNIQUE: Primary Data Questionnaire method Secondary Data Existing reports Books Journals and magazines 140

4 Websites LIMITATIONS OF STUDY Some were reluctant to share the information regarding income and investment decisions, which they thought was personal The sample size may not represent the entire population of Indian working women to draw a conclusion. ANALYSIS DEMOGRAPHIC PROFILE STATUS NO. OF RESPONDENTS WORKING WOMEN 250 AGE 26 to 35 years old to 45 years old to 60 years old 51 QUALIFICATION Graduation 96 Post - Graduation 104 Under - Graduate 50 FAMILY TYPE Joint 62 Nuclear 188 MARITAL STATUS Married 180 Unmarried 55 Divorced 15 WORK INDUSTRY Government organization 42 Private organization 208 MONTHLY INCOME 10,000-20, ,000 40, ,000 60, Above 60,

5 On being asked what their main preferred tool for investment was, the responses were as follows: Percentage, Mean and standard deviation of respondent s responses on categories where they invest their money Degrees of Agreement Strongly Agree Somewhat Dis Strongly Std. Options dis Mean Deviation Fixed deposits with banks Mutual funds Stocks/ shares Gold Real estate Fixed deposits with companies Insurance Post office/ PPF/ Government scheme Any other Since most of the respondents surveyed mentioned that their income was not the major source of earning for their family, whatever they earned only doubled up in total family investment in various sectors. The findings were as follows, They preferred to save their wealth in fixed deposits with banks. Second option preferred by them was to invest in gold by buying jewellery The third preferred option was insurance schemes. In the fourth slot, there was a tough competition between post office/ppf schemes and real estate, where post office and government schemes was picked up When asked, what was their main objective behind investment in various investment tools, their replies were as mentioned below: Percentage, Mean and standard deviation of respondent s responses on their main reasons of investment Degree of ment Strongly Agree Somewhat Dis Strongly Std. Main Reasons for Investment dis Mean Deviation High Returns Tax benefits Emergency need Retirement plans Security for the family Education of children

6 Marriage of children To spend later in life Others: The main reasons voiced by the respondents for investment in various tools were high returns, followed by retirement plans and to spend later in life. They also mentioned that tax benefits also lured them towards safer investment options When asked who influenced and helped them the most with good investment decisions, their replies were as mentioned below: Percentage, Mean and standard deviation of respondent s reasons for being employed Degree of ment Reasons for being employed Strongly Agree Somewhat Dis Strongly dis Mean Std dev Herself Husband In-laws Parents Friends/ colleagues Investment companies and their advertisement The organization in which she works Any other: neighbors, popular schemes, trends followed at home, siblings etc It can be concluded from the findings, that husband was the major influence in helping the wife with the investment decisions. Others, who influenced the working women, were the organization in which she worked, followed by the investment companies and their advertisements, followed by parents and in-laws. Friends, colleagues and to a minor extent neighbors and siblings also contributed in influencing a women in making sound investment decisions. When asked about the frequency of investment cycle, their replies were as mentioned below: Investment frequency cycle No. of Respondents Monthly 23 Quarterly 46 Half yearly

7 Yearly 108 Total Respondents 250 Majority of them mentioned that they made investment decisions on a yearly pattern followed by respondents who mentioned that they invested on a half-yearly basis. FINDINGS: The most important reason why a woman saves is because of a Precautionary motive. Respondents mentioned 3 major reasons for investing their income in fixed deposits with banks Safety o The fixed deposits of reputed banks and financial institutions regulated by RBI (Reserve Bank of India) are very secure and considered as one of the safest investment methods. Regular Income o Fixed deposits earn fixed interest rates for their entire tenure, which is usually compounded quarterly. So, those who want an income on a regular basis can invest into fixed deposits and use the interest rate as their income. This makes a fixed deposit very popular way of investing money for retirees. Saves tax o Fixed deposits save tax and give high returns on invested money. Respondents echoed the following reasons for investing in gold: o Apart from wearing it to gain admiration and an increase in social status, gold is considered as a safe investment bet by almost all the respondents o Many felt that the best way to pass down wealth to their heirs by investing in gold o Many felt that it would act as hedge against a monetary disaster The unanimous responses gathered for opting to invest in life insurance was: o Amount invested is secured o Safe and long term returns o Tax benefits for the investor and reimbursement to the benefactor The main motive behind investing is to fulfill their personal and financial goals. They also recognize the importance of multiplying savings through investment. Mutual funds, annuities, and long-term care insurance are certainly not new products, but they remain a bit of a mystery to many. Although such products can help women achieve their financial goals, women s lack of knowledge about these products may impact their ability to achieve these goals later on. On the personal front, the respondents also mentioned that: o If one is totally bankrupt yet have a few assets and investments left, one can easily opt for those investments and get money out of them to enjoy their life once again. o One need not have to beg in front of others to give them shelter in their bad times. 144

8 o Investment not only lets one earn good amount of profits, but also gives one enough strength to feel secured for future. Moreover, they also believed that, investing rightly made their families proud as it knew that no matter what happens, you have invested enough to feed them even if there are no sources of incomes left for you and them CONCLUSIONS: For the respondents o Make your long-term financial health a priority. o Make a detailed list of your assets (including all accounts and beneficiaries) as well as your debts and obligations. o Make a list of your financial goals, and the timeframe for reaching each one. o While outlining assets, liabilities, financial goals, and timeframes is a big step, you still need to develop a formal written plan for getting there. Focus on retirement, but plan for all of your major goals. o Decide whether you are most comfortable saving and investing on your own, would like to work collaboratively with an advisor, or would prefer to turn the financial planning and asset management over to a financial professional more fully o Work with people you trust those who will help you make the right level of progress, and inspire confidence that you are on track to a successful future o At least quarterly, update and track your progress. For the marketers o Saving money in Bank is the most preferred saving avenues. o For the marketers of investment organizations, include investment strategies that are responsive to women s concerns o Marketers need to be appreciative of the many demands women experience in their everyday lives o Marketers need to prepare women to be critical of the available financial investments instruments o Marketers need to come up with more serious focus, workshops, and demonstrations to shape women s confidence and financial decisionmaking skills o It can also be concluded that married women are more serious in making investment than the unmarried ones as they believe they have a sense of responsibility towards their family and children. o It can also be seen that the younger lot of working women are mostly like to invest in shares, mutual funds, insurance and fixed deposits 145

9 than the older experienced working women. o The middle age persons prefer to invest in real estate source of investment. o So the government, Bankers and Financial institutions can introduce lot of schemes of investment based on segmentation of the age and marital status factors to acquire more funds. o The study will help the financial institutions in designing exclusive instruments for women and to the Government in coming up with new policies for utilizing women s savings for the betterment of the economy REFERENCES: BBC, The women who want to save banking. Monday, 18 May. London: BBC. Beckmann, D. and Menkhoff, L., Will women be women? Analyzing the gender difference among financial experts. Kyklos, 61 (3), Bernasek, A. and Shwiff, S., Gender, risk, and retirement. Journal of economic issues, 35 (2), Jianakoplos, N.A. and Bernasek, A., Are women more risk averse? Economic inquiry, 36 (4), Martenson, R., Are men better investors than women? Gender differences in mutual fund and pension investments. Journal of financial services marketing, 13 (1), Investment Attitude of Women towards Different Sources of Securities - A Factor Analysis Approach, Dr. R. Sellappan α, Ms. S. Jamuna σ & Ms. Tnr. Kavitha, Global Journal of Management and Business Research Finance Volume 13 Issue 3 Version 1.0 Year 2013 Financial Experience & Behaviors Among Women Prudential Research Study, web based article Investment strategies and gender: a study of emerging patterns in India, James Thomas Kunnanatt & Mithu Emiline, journal of gender studies A Study on Investment Pattern and Awareness of Salaried Class Investors in Coimbatore District, * S. Umamaheswari ** Dr. M. Ashok Kumar, Indian journal of research, Volume : 2 Issue : 9 Sept 2013 An analysis of income and expenditure pattern of working women in the context of emerging consumer culture mini sukumar, kottyam, kerala 146