Abstract
This research gave attention to three factors that influence individuals in making investment decisions, motivation, locus of control, and financial literacy. This study generally aims to compare and analyze the effect of motivation, locus of control, and financial literacy on investment decisions on the families of the baby boomers generation, generation X, and generation Y. This study applied a direct interview method and uses a questionnaire as a data collection tool. Thirty housewives from each generation were interviewed. The results showed a significant difference in motivation and financia literacy between the three generations. The results also showed that all variables had a significant effect on investment decisions in each generation. Otherwise, overall, only the locus of control variable that has no significant effect on investment decisions. Based on this, the government together with investment service providers need to formulate an appropriate program. Apart from the education provided through educators, the program can also be provided with socialization and consultation services, either directly or indirectly. Development of supporting infrastructure and public access to financial institutions, products or services according to their needs and capacities also need attention.
Highlights
Complex global economic conditions and increasingly high economic demands bring people a necessity for a smart financial decisions that are prepared in the short term and in the long term
In the intrinsic motivation dimension generation Y, generation X, and the total group have an index which is dominated in the medium category
The results showed that all variables of motivation, locus of control, and financial literacy significantly influence investment decisions in each generation, unlike the case with the locus of control that shows no significant effect on groups of all generations
Summary
Complex global economic conditions and increasingly high economic demands bring people a necessity for a smart financial decisions that are prepared in the short term and in the long term. According to Wrihatnolo, Dwidjowijoto, and Nugroho (2007), a theory of economic development that still used adopted is the theory of savings and investment. This theory stated that the economy must have a particular portion of savings and investment in gross national product. The tendency of Indonesian people to be consumptive towards goods and services makes the community only focus on their shortterm needs without preparing their long-term needs as well as investments in education, health, or finance. The number of investors in the capital market is increasing every year, but based on data released by the Indonesian Central Securities Depository (KSEI), the total assets of shares still dominated by foreign investors
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