Financial Literacy's Influence on Investment Decisions

Abstract

Objective – This study examines how financial literacy affects Indonesia's millennial generation's financial behavior and investment decisions. This study will also look at the influence of financial literacy as mediated by financial behavior on the millennial generation's investment decisions. Methodology/Technique – This research utilizes quantitative methods. The demography for this study is the millennial generation in Jakarta, Indonesia, which comprises 15,575 people. A non-probability and purposive sampling strategy were used to sample 100 people. The analytical tool makes use of path analysis and Smart-PLS. Result - According to the study's findings, basic financial literacy does not impact the millennial age's investment decisions or financial behavior. Advanced financial literacy cannot impact the investment decisions of the millennial generation in Jakarta, but it can influence their financial behavior. The millennial generation's financial behavior might impact investing decisions. Basic financial knowledge does not influence Millennial investing decisions as mediated through financial behavior. Advanced financial literacy can influence Millennial investing decisions as mediated through financial behavior. Novelty - This research is expected to be a reference for the millennial generation in making investment decisions. The millennial generation is expected to increase financial literacy and improve financial behavior in making investment decisions. Type of Paper: Empirical JEL Classification: G2, G23 Keywords: Basic Financial Literacy, Millennial Generation, Financial Behavior, Investment Decisions Reference to this paper should be referred to as follows: Riwayati, H.E; Cahaya,Y.F; Markonah, M. (2023). Financial Literacy's Influence on Investment Decisions, Acc. Fin. Review, 8(1), 27 – 35. https://doi.org/10.35609/afr.2023.8.1(1)