IMPACT OF FINANCIAL LITERACY ON INVESTMENT DECISIONS

ВЛИЯНИЕ ФИНАНСОВОЙ ГРАМОТНОСТИ НА ИНВЕСТИЦИОННЫЕ РЕШЕНИЯ

Узокмирзаева Камола

студент Технического института Ёджу в Ташкенте,

Узбекистан, г. Ташкент

Элмуродов Шохжахон

научный руководитель, канд. наук, зав. кафедры Финансы Технического института Ёджу в Ташкенте,

Узбекистан, г. Ташкент

ABSTRACT

Financial literacy has already become one of the pivotal factors of successful investment decisions and outcomes, as it is an appropriate instrument for foreseeing the speculation behavior of people. Being financially literate means knowing how to manage money in order to meet the future goals. Financial proficiency is characterized as the ownership of information and aptitudes that empower educated and successful money administration. Money related proficiency is upgrading the financial advancements and financial development of the nation. In this regard, it is important to mention the impact of financial literary on Investment decisions, that financial education gotten in young ages has bigger roles on later future decision makings. This paper aims to show the importance of financial education on future investment decisions and well-being of the nation by emphasizing the knowledge taken at early schooling ages.

АННОТАЦИЯ

Финансовая грамотность уже стала одним из ключевых факторов успешных инвестиционных решений и результатов, поскольку она является подходящим инструментом для прогнозирования спекулятивного поведения людей. Быть финансово грамотным означает знать, как управлять деньгами для достижения будущих целей. Финансовое мастерство характеризуется как владение информацией и способностями, которые позволяют образованному и успешному управлению денежными средствами. Навыки, связанные с деньгами, повышают финансовые достижения и финансовое развитие нации. В этой связи важно упомянуть о влиянии финансовой литературы на инвестиционные решения, о том, что финансовое образование, полученное в молодом возрасте, играет большую роль в принятии решений в будущем. Цель этой статьи-показать важность финансового образования для будущих инвестиционных решений и благосостояния нации, сделав акцент на знаниях, полученных в раннем школьном возрасте.

Keywords: Investment decisions, financial literacy, future well-being, money relationships.

Ключевые слова: Инвестиционные решения, финансовая грамотность, будущее благополучие, денежные отношения.

Throughout the lifetime of the people, individuals face many times making investment decisions and choosing the most proper one from all possible choices that brings more income. The world economy has gotten to be more complex and in this way, each person has to be dynamic and smart in investment choices in order to oversee the rising cost of living. [1] Numerous people are curious about one investment or the other, they see ventures to be interesting since they make choices and afterward see the outcomes of the choices they made.

The level of money related knowledge of a person impacts the investment choices such a person will make. The higher the financial information level of an individual, the way better his speculation choice. [2] The age of a person influences the decision making when it comes to investments, more mature individuals may think more of retirements than younger people, hence they may be more dynamic in investments such as pension plans and other retirement plans. Within the final couple of years, money related proficiency gotten uncommon consideration from analysts, money related teach and arrangement creators. The capability to oversee individual accounts has ended up increasingly imperative in today's world. Individuals must arrange for long-term speculations for their retirement and children's instruction. They must too choose on short-term investment funds and borrowing for a get-away, instruction, emergency, a house, a car credit, and other things. Moreover, they must oversee their claim restorative and life insurance needs. Financial proficiency could be a fundamental concept in understanding cash and its utilize in daily life. This incorporates the way wage and consumption are overseen and the capacity to utilize the common strategies of exchanging and administering money.

Moreover, money related education means an understanding of ordinary circumstances that need to be caught on such as investment funds, borrowings, credit and protections. The understanding of monetary wordings and ideas incorporates an understanding of key monetary views central to investing and overseeing stores to extend riches and security. People require a mindfulness of highlights accessible for borrowing and contributing. This mindfulness incorporates the understanding of brochures and yearly statements, complex intrigued calculations and postponing the use of stores for utilization. People need to be aware that more return ventures are moreover likely to include high risks, the realization that market values drop as well as rise, and the standards of variety.

Studies on individual finance have inspected the critical effect of Financial Literacy on financial improvement, for example through the impacts of financial absence of education on financial choice making. [3] The method of financial proficiency is to form individuals aware around secure investment funds and other speculation items accessible. This developed mindfulness will lead to superior financial behavior in terms of saving, budgeting and using the credit admirably at cheaper cost. The table below shows the importance of financial literacy on investment decisions by giving indicators such as financial literacy rates and Investment % from GPD both in 2017 of 19 developing countries. From the given table it is more clear that financial literacy is critical factor on making Investment decisions and high returns.

Table 1.

FL and Investment decisions relations [4]

To sum up, it is important to mention that financial literacy is an important factor in this competitive society which gives people superiority on making money related decisions, safe savings and other investment decision making processes. Being financially literate plays a big role in making a low risk investment decision as, financially educated person possess all necessary knowledges such as inflation, risk, consumer behavior, market supply and demand, outcome return management, more crucially, knows how to manage money. Also financial literacy creates more advancements in social terms as well, including improved saving rates, lower levels of debt, increased rates of asset accumulation and etc.

References:

1. Baker, H.K. & Nofsinger, J.R. (2010). Behavioral  Finance:  Investors,  Corporations  and  Markets.  New Jersey: John Wiley and Sons.
2. HC, R. Heru Kristanto and Gusaptono, R. Hendry, The Impact of Financial Literacy on Investment Decisions Between Saving and Credit: Studies on Sharia Bank Customers in the Special Region of Yogyakarta (November 16, 2020). Journal of Economics and Business, Vol.3 No.4 (2020), Available at SSRN: https://ssrn.com/abstract=3730529
3. Impact of Financial Literacy on Investment Behavior and Consumption Behaviour of Middle-Class Families in Karnataka, India. International Journal of Advanced Science and Technology, 28(19), 634 - 647. Retrieved from http://sersc.org/journals/index.php/IJAST/article/view/2583
4. https://www.worldometers.info/gdp/gdp-per-capita/ and https://howmuch.net/articles/financial-literacy-around-the-world