Management of Personal Finances and Investment Decisions

Abstract

The effective management of personal finances and investment decisions plays a pivotal role in achieving and maintaining financial stability. The present study investigates the many determinants that impact the decision-making process of individuals when it comes to investing decisions, as well as the subsequent financial results that ensue over an extended period. Through the use of a quantitative research methodology, this paper analyzed a representative sample of 1,000 individuals to examine their investing habits. This investigation took into account many factors like risk tolerance, financial literacy, and investment horizon. The results of our study demonstrate a significant association between financial literacy and investment performance, as individuals who obtained higher scores on financial literacy evaluations had superior investment returns over an extended period. Besides, it was observed that risk tolerance emerged as a noteworthy predictor of asset allocation methods, as people with a lower tolerance for risk tended to choose investment portfolios that were more cautious and less prone to volatility. The present research aims to enhance understanding of the influence of individual financial choices on the attainment of sustained financial stability. The findings of our study emphasize the significance of financial education programs and customized investing approaches for people to make well-informed choices that are in line with their financial objectives.