hadiza project

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ANALYSIS OF INVESTMENTS BY WORKERS: A STUDY OF ABU

CONGO CAMPUS

CHAPTERONE: INTRODUCTION

1.1 BACKGROUNDOFTHESTUDY

Investment can be viewed from two perspectives. Deposit of savings

in bank accounts or used for payment of premiums of a life policy also

called money investments. The other perspective is the purchase of previous

metals or land with the hope selling in the future. Investment can be seen as

the acquiring of new assets like plants, equipment and machinery, which

provides the means of production of goods and services.

The importance of investment to national development and to the

investing individual cannot be overemphasized. It is when people invest into

profitable ventures such as manufacturing, that there will be increase in

goods and services leading to high gross domestic product (GDP). And it

will bring about job opportunities thereby increasing per capita income. In


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addition, it helps in human resources development, which contribution to

national economic growth and development is very vital.

Institutions and individuals alike invest at one or the other. Institutions

invest to increase the earnings of its shareholders. James (2004) identified

some basic factors to be considered before decision to invest is made. They

are: the generation of investment proposals; estimation of cash flows for the

proposals; evaluation of cash flows; selection of projects based on

acceptance criterion; and finally, continual re-evaluation of investment

projects after their acceptance. These factors can also be said to be the

generally accepted factors that affect decisions to take a project by a

business firm.

On the other hand, individuals when making a decision to invest have

factors to consider. They include, among others, marketability of the

business; tax status and size of investment units or denomination. Other

factors include age of the worker, that is, older peoples attitude towards

investment is different from the younger people; level of income and family

size. These are the general factors that influence peoples choice to invest.

However, this study is set out to know those factors that affect individual

workers decisions to invest in Nigeria. In this vein, we shall try to see

whether the general factors applicable in developed countries really affect


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Nigerian workers and to what extent. This shall be done by paying closer

attention to the earning of the workers most especially seeing that they have

a stable and regular flow of income (salary). The major assumption here is

that level of income is determined by the grade level of the worker.

1.2 STATEMENTOFTHEPROBLEM

In developed economics, like USA, Britain and Canada there is a

considerable interest in investment behaviour of individuals on the part of

business strategists, public officials and ordinary people. This is especially

true where the growth of mutual funds and self-directed retirement accounts

in the past few decades have transformed the assets holdings of millions of

middle-class individuals.

This is somehow far from what obtainable in Nigeria, most especially

among workers. Workers are paid salary at the end of every month. The

income level depends on period of service, level of education and unit or

place of work among others. Some of these workers are observed to invest a

considerable portion of their salary and they tend to live better as well as

suffer little or nothing even after retirement from active service. Another set

of workers are also observed not to invest any part of their income. These

are those workers who are said to live from hand to mouth. They suffer after

retirement.


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The question one may pose is what exactly is responsible for what is

obtainable in Nigeria (to workers) as opposed to in other countries? What

really motivate some workers to invest and others not to invest, can it be that

there is enough capital or not to invest, or there is awareness or no awareness

on part of the workers of the benefits inherent in investment, or are there

other factors that really affect workers investment decision?.

1.3 OBJECTIVESOFTHESTUDY

The following are the objectives of this research.

1. To find out the factors affecting workers investment decision inA.B.U. Congo campus,Zaria.

2. To find ways of encouraging workers to invest part of theirmonthly/annual income.

3. To find out various investments undertaken by workers of Congocampus.

1.4 STATEMENTOFHYPOTHESIS

In carrying out this research, two hypotheses shall be stated:

Hypothesisone

Ho: salary does not affect workers decision to invest.


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H1: salary affects workers decision to invest.

Hypothesistwo

Ho: Number of dependents does not affect workers decision to invest.

H1: Number of dependents affects workers decision to invest.

1.5 SCOPEOFTHESTUDY

The study will concentrate mainly on the factors influencing ABU

Congo individual workers investment decision, paying close attention to

their incomes (salaries). The period 2006 to 2010 was chosen because this is

a period in which workers salaries have been increased significantly and it

will be rational to study their investment decision in this period.

1.6 SIGNIFICANCEOFTHESTUDY

One of the major beneficiaries of this research work will be the

corporate entities, as the findings of this study will give them a guide to what

to do to attract investors and who should be their targets, for example if age

has influence on investment decision, then they will know which age group

to target most and if salary has affect on investment decision they will target

mostly those on higher salary scale


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Researchers wishing to write on this topic in a larger scope will find

this work a useful reference, while others researchers writing on related

topics will also find it useful.

Also, the government will appreciate the findings of this study as it

will help in devising ways of inculcating means of encouraging workers to

invest. The findings will help government officials in recommending ways

of helping workers save for rainy days. In addition, workers will find the

study very useful as those workers who currently invest will appreciate the

recommendation on how to invest further while those who do not invest will

see the benefits inherent in investing and as such be motivated to start

investing.


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CHAPTERTWO

LITERATURE REVIEW

2.1 INTRODUCTION

This chapter is concerned with looking at the literature on investment

decision. In doing this, we shall look at different scholars perspectives on

the concept of investment, studies on investment behaviour, types of

investment, and risk associated with investment, also, the chapter will

discuss major constraints to investment choices faced by individuals.

2.2 CONCEPTOFINVESTMENT

Investment or investing is a term with several closely-related meanings in

business, management, finance and economics. It is related to saving. The

term is seen by different authors to be different thing. Chandra (2008)

defines investment as a sacrifice of current money or other resources for

future benefits, while Marx (2006) defines investment as the current

commitment of money, based on fundamental research, to real and/ or

financial assets for a given period in order to accumulate wealth over the

long term.

Gitman and Joenhk (2008) define investment as any vehicle into

which funds can be placed with the expectation that it will generate positive

income and/or preserve or increase its value. The rewards or returns from


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investing are received in either of two basic forms; current income or

increase value. For example, money invested in a bank savings account

provides current income in the form of periodic interest payments. Similarly,

buying a piece of raw land is an investment, because the land is expected to

increased in value between the time it is purchased and the time it is sold.

Investment, therefore, is the choice by the individual to risk his savings with

the hope of gain. Rather than store the goods produced, or its money

equivalent, the investor chooses to use that goods either to create a durable

consumer or producer goods, or to lend the original interest or share of the

profits.

Fischer and Jordan (2005) define investment as a commitment of

funds made in expectation of some positive rate of return. They further said

if the investment is properly undertaken, the return will commensurate with

the risk the investor assumes.

Sharpe, Alexander and Bailey (2003) say investment in its broadest sense

means the sacrifice of current dollars for future dollars, , they added that

two different attributes are involved in investment i.e. time and risk, the

sacrifice takes place in the present and is certain, the reward comes later, if

at all, and magnitude is generally uncertain.


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Gup (1993) defines investment as committing funds for the

purchase of securities or real assets in order to gain a profit or interest

securities are claims organization sell in order to raise money to meet their

financial needs. Real assets consist of tangible items like real estate, antiques

germs, gold and works of arts. Investment in these has aesthetic value

because one can appreciate antiques, wear germs, and enjoy looking at

works of arts.

2.2.1 TYPESOFINVESTMENT

Choice of investment depends on a combination of resources, investment

goals, and personality of the investor. Phillip and lund (1979) divided

investment into five separate classes consisting of human potentials,

intangible assets, financial assets, stocks and work-in-progress and finally

fixed assets. However we shall adopt the types of investment given by

Gitman and Joenhk(2008) who gave the following types of investment as:

1) securitiesorpropertiesThese are investments that represent evidence of debt or ownership (of a

business or other assets) or the legal rights to acquire or sell on ownership

interest (in a business or other assets) are called securities. The most


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frequently used types of securities are stocks, bonds, and option. Property on

the other hand, consists of investments in real property or tangible personal

property, real property is land, buildings and that which is permanent affixed

to the land. Tangible personal property includes items such as gold, art work,

antiquities and other collectibles.

2) DirectOrIndirectA direct investment is one in which an investor directly acquires a claim on

a security or property. It includes buying stocks, bond, a parcel of real estate,

or a rare coin in order to earn income or preserve value. An indirect

investment is an investment made in a portfolio, or collection of securities or

properties, typically constructed to meet one or more investment goals.

3) Debt, EquityOrDerivationUsually, an investment represents either a debt or an equity interest. Debt

represents funds lent in exchange for interest income and the promised

repayment of the loan at a given future date. Buying a debt instrument like

bond, in effect is lending money to the issuer, who agrees to pay a stated rate

of interest over a specified period of time, at the end of which the original

sum will be returned.


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Equity represents ongoing ownership is a specific business or property. An

equity instrument may be held by title to a specific property or as security.

The most popular type of equity security is common stock.

Derivative securities are neither debt nor equity. They derive their value

from and have characteristics similar to those of an underlying security or

asset options are an example.

4) LowOrHighRiskInvestments are sometimes differentiated on the basis of risk. As used in

finance, risk refers to the chance that the value or return on investment will

be less than expect. The broader the range of possible values or return

associated with an investment, the greater the risk.

Although each type of investment vehicle has basic risk characteristics, the

actual level of risk depends on the specific vehicle. For example, stocks are

generally believed to be more risky than bonds. Low-risk investments are

those considered safe with regard to the receipt of a positive return. High-

risk investments are considered speculative; their levels of income and

future are highly uncertain.

5) ShortorLongTerminvestmentThe life of an investment can be described as either short or long term.

Short-term investments typically mature within one year. Long-term


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investments are those with longer maturities or, like common stock with no

maturity at all.

2.3 STUDIES ON BEHAVIOUR OF INVESTORS

Literature suggests that major research in the area of investors behavior has

been done by behavioral scientists such as Weber (1999), Shiller (2000) and

Shefrin (2000). Shiller (2000) who strongly advocated that stock market is

governed by the market information which directly affects the behavior of

the investors. Several studies have brought out the relationship between the

demographics such as Gender, Age and risk tolerance level of individuals.

Of this the relationship between Age and risk tolerance level has attracted

much attention.

Horvath and Zuckerman (1993) suggested that ones biological,

demographic and socioeconomic characteristics; together with his/her

psychological makeup affects ones risk tolerance level. Malkiel (1996)

suggested that an individuals risk tolerance is related to his/her household

situation, lifecycle stage and subjective factors. Mittra (1995) discussed


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factors that were related to individuals risk tolerance, which included years

until retirement, knowledge sophistication, income and net worth.

Guiso, Jappelli and Terlizzese (1996), Bajtelsmit and VenDerhei (1997),

Powell and Ansic (1997), Jianakoplos and Bernasek (1998), Hariharan,

Chapman and Domain (2000), Hartog, Ferrer-I-Carbonell and Jonker (2002)

concluded that males are more risk tolerant than females.

Wallach and Kogan (1961) were perhaps the first to study the relationship

Between risk tolerance and age. Cohn, Lewellen et.al found risky asset

fraction of the portfolio to be positively correlated with income and age and

negatively correlated with marital status. Morin and Suarez found evidence

of increasing risk aversion with age although the households appear to

become less risk averse as their wealth increases. Yoo (1994) found that the

change in the risky asset holdings were not uniform. He found individuals to

increase their investments in risky assets throughout their working life time,

and decrease their risk exposure once they retire. Lewellen et.al while

identifying the systematic patterns of investment behavior exhibited by

Individuals found age and expressed risk taking propensities to be inversely

related with major shifts taking place at age 55 and beyond.

Rajarajan V (1997, 1998, 2000 and 2003) classified investors on the basis of

their demographics. He has also brought out the investors' characteristics on


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the basis of their investment size. He found that the percentage of risky

assets to total financial investments had declined as the investor moves up

through various stages in life cycle. Also investors' lifestyles based

characteristics has been identified. The above discussion presents a detailed

picture about the various facets of risk studies that have taken place in the

past. In the present study, the findings of many of these studies are verified

and updated.

2.4 FACTORS AFFECTING INDIVIDUAL INVESTMENT

DECISION

Many scholars have attempted over time to study those factors responsible

for individual investment. Every investor has certain personal factors that

govern or limit how he or she should invest. The basis investment problem is

to maximize investment returns within the framework of these financial,

constraints. Many scholars consider emotions, finance, economy, annual

income and age as the major constraints to investment decisions. However,

BryantandSylvia (1989) summarized the major constraints as follows


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1) Ability to risk loss of investment income and principal. This in turn isinfluenced by a number of personal factors such as:

a) Earnings and the nature and ability of employment;b) Other sources of income;c) Age, health, family responsibilities and other obligations,d) Overall assets, liabilities and net worth position (personal balance

sheet):

e) Whether one has closely held business interests or other relatingnon-marketable assets;

f) Plans to use investment principal for particular purpose, such aseducational expense, retirement, failure gifts, and estate settlement

cost;

g) The extent to which one needs current living investment incomefor personal or business current living expenses.

h) The degree and duration of price inflation (or deflation) felt are being risked and how other assets and sources of income will be

affected by inflation (or deflation).

2) The degree of liquidity and marketability needed to maintain inportfolio.


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3) How well one is able to withstand the ups and particularly the downsin the securities markets. That is to say, can one afford to hold on to

securities during a bear market and wait for better times?

4) Overall tax and estate status, including consideration of income andestate tax positions.

5) The quality of investment management services available to theinvestors.

6) Investors attitude and emotional tolerance for risk.

2.5 PRINCIPLESOFINDIVIDUALINVESTMENT

The investment principles adopted by institutions are not far different

from those adopted by individual. There are many sources of advice for

investors including newspaper columns and magazines articles on personal

investing, such as vanguard, Biznews and a lot of others. However, we

summarize the major principles as follows:

While there are some differences in advice provided by various sources, a

non exhaustive search indicates they generally agree on a set of practical

guidelines that we can summarize them as follows.

1) Investors should have an emergency fund invested in short-term safeassets. This find should be held outside of ones retirement account to


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avoid the tax and other penalties generally associated with having to

withdraw funds prematurely from a retirement account.

2) Funds saved for retirement should be invested primarily in equitiesand longer-term fixed-income securities.

3) The fraction of assets invested in equities should decline with age. A popular rule of thumb regarding the age-equity relationship is that the

percentage of ones portfolio to invest in equities should be too minus

ones age. So a person 30 years old should invest 70% in equities, and a

person aged 70 should invest 30% in equities. The fraction invested in

equities should increase with wealth because a wealthier individual

should be able to handle more risk.

4) Tax-advantaged assets, such as municipals bonds should be heldoutside of ones retirement account, and then at all. More generally,

assets that are taxed more heavily (such as taxable bonds) should be held

inside ones retirement account, while those that are taxed less heavily

(such as non-dividend paying equities) should be held outside ones

retirement account.

5) All investors should diversity their total portfolio across assetclasses, and the equity portion should be well diversified across


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industries and companies. There are two ways incorporate this principle

into investment selection process.

CONSERVATISM: Investors have a peculiar habit of extrapolating recent

events into the future. When times are good, they become overly optimistic

about the prospects of their enterprises; as Graham Dodd pointed out, the

chief risk is not overpaying for excellent business, but rather, paying too

much for mediocre business, but rather, prosperous times.

To avoid this sorry situation, it is important that investors err on the side

of caution, especially in the area of estimating future growth rates when

valuing a business to determine the potential return. For an investor with a

15 percent required rate of return, a business that generation N1per share in

profit is worth N14.29 if the business is expected to grow at 8 percent; with

expected growth of 14 percent, however, the estimated intrinsic value per

share is N100, or seven times as much!

6) Operating performance of this business should be yardstick.Investors should hold small pieces of excellent businesses with the same

tenacity they would if they owned the entire company. Over time, the

operating result and the share price are inextrinsicably linked. If a

company cannot continue to exist as a viable entity, the investors will

eventfully lose everything.


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7) Have a rational deposition toward priceThere is one rule of mathematics that is inaudible: the higher a price you pay

for an asset in relation to its earnings, the lower you return. Its that simple

the same stock that was a terrible investment at N40 per share may be a

wonderful investment at N20 per share.

8) Be Alert AlwaysEvery potential investor who desires to make a portfolio and maintain a

minimum risk with high return must set his or her eyes open at all times.

This will help in capturing and utilizing any opportunity. It goes beyond

reading through pages of investor advisor magazines for information.

9) Allocate Capital By Opportunity CostInvestors should answer questions like: should I pay off my debt or invest?

Buy government bonds or common stock? Go with a fixed rate or interest

only mortgage? The answers to financial question such as these should

always be made based upon expected opportunity cost. All of the sources we

consulted recognize that the optimal asset mix for a particular household

might differ from the general mix they recommend because of the special

circumstances or risk-preferences of the given household. For example

married couples with both partners working might want to invest a larger

fraction of their wealth in equalities than otherwise identical single people.


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Or, people with uncertain job prospect, might want to invest less in equities

than people with relatively predictable labour income. (Magaji, 2008 ).

CHAPTER THREE: Research Methodology

3.1 INTRODUCTIONThis chapter shall look at the methodology of this research, where the

research design used, sources of data for the study, methods of data

collection and analysis and the reasons for adopting the methods chosen

will be highlighted

3.2 RESEARCH METHODOLOGY

Research design means the structuring of investigation aimed at

identifying variables and their relationships to one another. This is used for

the purposes of obtaining data to enable the researcher test hypothesis or

answer research questions. It is an outline or a scheme that serves as a useful

guide to the researcher in his efforts to generate data for his study.


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In this research, this study used the survey method of research to carry

out the investigation into the factor that affect workers investment habits in

A.B.U Congo campus.

3.3 POPULATION AND SAMPLE OF THE STUDY

Sample is a sub set of population. Whereas population deals with a large

group, sample is only an integral part of that large group. The population of

the research is entire member of staff of A.B.U Congo campus, Zaria, which

will include academic staff, non-academic staffs, senior and junior alike,

while the sample used consists of fifty (50) workers.

The sampling technique adopted was random sampling method. In

doing this, convenience rather than seeking to get representatives was

employed because it is so easier.

3.4 SOURCES OF DATA

Data is raw information. Basically, there are two sources of data for

every research. It can either be primary or secondary data.

Osuala (2005) defines primary data as data expressly collected for a

specific purpose. The collection of facts and figure relating to the

population in the census provides primary data. The main advantage of

obtaining such data is that information wanted is obtained. In the present


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study, the researcher used responses of the respondents to serve as the

primary data.

3.5 METHODS OF DATA COLLECTION

Data can be collected using different instrument or tools. Each tool

used is to a greater extent determined by the type of research method

adopted.

For the purpose of this research, questionnaires and observations were

selected as the main instruments for collecting primary data. Questionnaires

were designed and distributed to respondents. The questionnaires were in

both open and close ended form. In the open ended questionnaires,

respondents were allowed to say their views and opinion while the close-

ended limited the respondents views by providing alternatives to select. In

order to verify data got through this source, observation was also adopted.

3.6 METHODS OF DATA ANALYSIS

To be useful, research must be interpreted in the light of the condition

under which it was done. In addition, consistency of results should be

considered in arriving at conclusions regarding the applicability of the

interpretation in various research studies. Data analysis is the ordering and

breaking down of data into constituent parts. It consists of the statistical


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calculation performed with the raw data to provide answers to the questions

initiating the research.

The tool adopted to test the hypothesis is chi-square (X2). This is used

in testing hypothesis concerning difference between a set of observed

frequencies of a sample and a corresponding set of expected or theoretical

frequencies. It is computed thus:

X2= (fo - fe)

2

fe

Where X2= chi-square

f = Observed frequencies

f = expected or theoretical frequency

= summation sign

3.7 JUSTIFICATION OF ADOPTED METHOD

Survey research method was chosen because of its advantages and

simplicity in collecting and analyzing data. This was complemented using

questionnaires and observation in collecting the primary data so as to cover

much within the little time available. The population was divided into two

groups, senior and junior staff and the random sampling method was

adopted so as to get the response of all the representatives and because it is

easier.


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CHAPTER FOUR: Data Presentation and Analysis

4.1 INTRODUCTION

This chapter will cover data presentation and analysis, historical

background of ABU Zaria will be discussed.

4.2 HISTORICAL BACKGROUND OF A.B.U

The Ahmadu Bello University was founded on October 4, 1962 as the

University of Northern Nigeria by the Northern Region Government and

was taken over as a Federal Institution in 1975. The university was

established and suggested by Ashby.

As stated in part (ii) of its principal law, the university was created to,

among other things, produce high level and middle level manpower, secure

the diffusion of knowledge, research and community service in Northern

Nigeria and Nigeria in general, and to function as a centre of excellence.

Ahmadu Bello University operates two main campuses, Samaru and

Kongo campus. The Samaru campus, hosts the Administrative offices,

sciences, social-sciences, Art and languages, education and research

facilitates. The Kongo campus hosts the faculties of law and administration

consists of Accounting, Business Administration, local Government and

development studies, and public Administration departments.


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4.3 DATA PRESENTATION AND ANALYSIS

In the course of conducting this research, fifty (50) questionnaires

were distributed to the sample workers of Ahmadu Bello University Zaria,

congo campus. The questionnaire was constructed in such a way that

respondents will either tick or make comments. However, thirty (30)

questionnaires were duly filled and returned. As such, presentation of the

data here shall be based on the thirty (30) questionnaires returned.

Table 4.1: Sex of the Respondents

Options No of respondents Percentage (%)

Male 20 66

Female 10 34

Total 30 100

SOURCE: Questionnaire administered 2011

Table 4.1 above shows that 20 (66%) of the respondents are males

while 10(34%) are females. This shows that most of the respondents are

males.

Table 4.2: Age


21 30 3 10


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31 40 10 33

41 50 12 40

51 and above 5 17

Total 30 100


From table 4.2 above, out of the thirty (30) respondents, 3(10%) are

between ages 21 30, 10 (33%) are between ages 31 40 and those of ages

41 50 years are 12 (40%). Also, those whose ages are above 50 years are 5

(17%).

Table 4.3: Marital Status


Married 24 80

Single 5 17

Divorced 1 3

Total 30 100

SOURCE: Questionnaireadministered2011

The 4.3 shows the marital status of the respondents. From the table,

24 (80%) are married, while those who are single and that are divorced are 5

(17%) and 1 (3%) respectively.

Table 4.4: Educational Qualification


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School certificate 5 17

NCE/OND 14 46

B.Sc./HND 6 20

Post graduate 5 17

Total 30 100


It is apparent from table 4.4 above, among the respondents who have

school leaving certificate and postgraduate either degree or diploma have the

same number of respondents, that is 5(17%) each. Those who have National

Certificate in Education (NCE) and Ordinary National Diploma (OND) are

the majority of the respondents with 14 (46%). Also, those who have either

B.Sc. or HND are 6 (20%) in number.

TABLE 4.5 Number of Dependent (s)

Option No of respondents Percentage (%)

Nil 0 0

1 3 6 20

4 6 12 40

7 9 8 27


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10 and above 4 13

Total 30 100


11

Respondents were asked number of their dependents and their

responses are shown in table 4.5 above. 6 respondents, represented by 20%

between 1 and 3 dependents, those who have 4 to 6 dependents are 12 (40%)

are in number. While those who have 7 to 9 dependents are 8 (27%). Also,

those who have more than 9 dependents are 4(13%).

Dependents in this respect include those whose living depends solely

on the income of the workers. They include children, aged parents and

relatives.

Table 4.6: Period of Service

Options Number of respondents Percentage (%)

Less than 5 2 7

6 10 4 13

11 15 5 17

16 20 9 30

21 and above 10 33

Total 30 100



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From table 4.6 above, respondents who have worked for less than 5

years are 2 (7%), those who have worked for 6 to 10 years are 4 in number

and are represented by 13%. 5 respondents, represented by 17% have

worked for between 11 and 15 years. Those who have served for between 16

to 20 years are 9 (30%) in number. Also, 10 (33%) have been in service for

more than 20 years. This means that most of the respondents (33%) have

been in service for long and some are even about to retire and become

pensioners.

Table 4.7: Current Grade Level


01 04 2 7

05 08 16 53

09 12 7 23

13 and above 5 17


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Total 30 100


As shown in the table above, 2 (7%) respondent are currently on grade

level 01 04, 16 (53%) are on grade level 05 08. Also, those on grade

level 09 12 are 7 (23%) while those on grade level 13 and above are 5

(17%) in number.

The grade level of each worker is determined by educational

qualification and period of services. Therefore, the number of respondents

currently on grade level 05 08 is the highest respondents, which

corresponds closely with data presented earlier in table 4.4.

Table 4.8: Aware of benefit of investment

Number of respondents Percentage (%)

Yes 23 77

No 7 23

Total 30 100



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Table 4.8 above shows the number of respondents who are aware of

benefits inherent in investment to be 23 represented by 77%. While 7(23%)

said they are not aware of the benefits inherent in investment.

The awareness as earlier stated is as a result of the campaigns

embarked upon by government to educate and enlighten the citizens of the

gains one derives by investing part of his income for future purpose. Also,

with the enactment of pension Reform Act 2004, many pension fund

administrators have been canvassing for workers patronage by advertising

their services thereby enlightening the workers of the benefits of investments

in form of requirement saving account (RSA).

Table 4.9: Familiar types of Investment

Option Number of

respondents

Percentage

Shares and stocks 11 37

Real Estate and Properties 5 17

Precious Stones and Gels 2 7

Self-owned business 4 13

All of the above 8 26


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Total 30 100


Respondents were asked the types of investment they were familiar

with so as to know the one they are involved with or will to into if

circumstance warrants. The responses obtained are presented in table 4.9

above, with those familiar with investment into share and stocks having the

highest number of respondents that is 11 (37%). Those who are familiar with

real estate and properties that is investment into lands and buildings are 5

(17%), Also, those who are familiar with precious metals and gels (including

women Jewelries) are 2 (7%), while those who are familiar with owning and

running a business are 4 (13%),. 8 respondents represented by 26% are

aware of all the listed forms of investment as well as other which include

farming and animal husbandry.

The fact that most respondents (37%) are familiar with shares and

stock is not far from the governments emphasis or enlightenment on need to

purchase the stocks and shares of its privatized agencies.

Table 4.10: Whethernumberofdependentsaffectsdecisiontoinvest


Yes 19 63

No 11 37


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Total 30 100


The responses on whether the number of dependents affects workers

decisions to invest are presented in table 4.10 above. From the table, 19 of

the respondents, represented by 63% are of the view that dependents affect

their decisions to invest. However, 37% of the respondents have a contrary

view.

Table 4.11: WhethersalaryisEnoughforonetoInvest


Yes 9 30

No 21 70

Total 30 100


Table 4.11 above shows that 9 (30%) of the respondents are of the opinion

that their monthly earnings in form of salary is enough for them to invest. A

contrary view is held by the majority (21) of the respondents represented by

70%. This means that the monthly income of workers in Nigeria is not

enough for them to invest. They have family immediate and extended issues


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to attend to, size of the income and other factors affect the sufficiency of the

income to think of investment.

Table 4.12:WhetherGovernmentgivesanyincentiveforinvestment


Yes 4 13

No 26 87

Total 30 100


Table 4.12 above shows responses obtained on whether government

gives them any incentive/allowance to invest. 4 respondents, represented by

13%, are of the opinion that there is an incentive from government to invest,

while 26 (87%) of the total respondents opined to the contrary. This means

that there is no any incentive from the government given to workers in order

to invest. In order to encourage workers to invest, there should be an

incentive given either at the end of every year or biannually.

Table 4.13: Reasonsforinvestment

Option No of respondents Percentage (%)

To increase wealth 7 23

To save for rainy days 13 43


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To make name 2 7

To create job opportunities 8 27

Total 30 100


The responses in table 4.13 above shows that those who invest to

increase wealth are 17 (23%), those who believe that investment is to save

for rainy days are 13(43%), and those who invest to make name are 2(7%).

Also others are of the opinion that investment is to create job

opportunities for the unemployed youths roaming the streets. These are 8 in

number and are represented by 27%.

4.4 TEST OF HYPOTHESIS

Earlier in chapter one of this project, hypotheses to be tested were

stated. Also, in chapter three, the tool to be used in testing the hypotheses

was stated to be chi-square. Therefore, in this section we are going to test all

the hypotheses. Chi-Square is given as the follows:

X2

= (fo fe )2

fe

Where: = Summation sign

fo= Observed Frequencies


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fe = Expected or theoretical frequencies=total frequency/no of

categories=30/2=15

Hypothesis one

Ho: salary does not affect workers decision to invest.

H1: salary affects workers decision to invest.

To test this hypothesis response to question on table 4.11 will be used.

fo fe fo_- fe (fo fe) (fo fe)2

fe

9 15 -6 36 2.4

21 15 6 36 2.4

X=4.8

The table value X IS 3.84 and the calculated value is 4.8. Therefore, since

the calculated value is greater than the table value we reject the null

hypothesis, which states that salary does not affect workers decision to

invest, and accept the null hypothesis which states otherwise.

Hypothesis two


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H0 = Number of dependents does not affect ones decision to invest.

H1 = Number of dependents affect ones decision to invest.

Table 4.4.1: Chi-square

fo fe fo_- fe (fo fe) (fo fe)2

fe

19 15 4 16 1.07

11 15 - 4 16 1.07

X2=2.14

At a significance level of 0.05 and one degree of freedom (i.e. 2 1 = 1)

Critical value is 3.84 (Chi-square table) and the calculated value is

2.14. Therefore, since the calculated value is less than the critical (table)

value we accept the null hypothesis, which states that number of dependants

does not affect worker s decision to invest, and reject the hypothesis which

states otherwise.


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CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 INTRODUCTION

This chapter discusses summary, conclusion and recommendation of

the whole work.

5.2 SUMMARY

In chapter one, a general introduction of the study was made, stating the

problem of the study and research hypotheses was developed, objectives,

scope of the study were stated in the chapter.

Related literatures were reviewed in chapter two of the research. The

concept of other authors view on the investment, studies on investor

behavior, types and risk and investment were considered.

In chapter three, the methodology adopted for the research was

discussed. Also, the source of data used was mentioned i.e. primary source.

The method used in analyzing data collected was chi-square. Chapter four

dealt with presentation and analysis of data.It was gathered from the analysis

of data and test of hypothesis that factors that affect workers investment

decisions are: number of dependents, salary level, and non-ability of funds to

invest among others.


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Finally, this chapter contains conclusion based on the findings of the

study and recommendations on the way forward.

5.3 CONCLUSION

The social security system of Nigeria is still at infancy stage. This is

can be seen as many retirees and aged people have difficulties fending for

themselves.

The inability of workers to invest is not far from the fact that their

income is not enough to cater for their immediate needs. The supposedly

take home pay does not really reach home not to talk of saving or

investing to gain profitable. However, this is not to say that Nigerian

workers do not get paid at all, but on the average, the income is not enough

to invest.

Workers in Nigeria know what it means to postpone current

consumption with hope of better one in the future investment, but the

economic condition, social welfare as well as peace of the society tend to be

some of the major factors that affect their decision to invest some workers

try as much to save a little even through there is so any incentive given to

them by government. Little one wonders, despite the fact that workers

receive salary every month yet there they do not invest. Rather they live


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hand to month, and after retirement, they are seen roaming about looking for

their entitlement.

5.4 RECOMMENDATIONS

The study conducted has made some discoveries. Hence, the

following recommendations are made concerning the investment habits of

workers in Nigeria:

1. Government should make provision for investment increasing the wages

and salaries of workers. This will not only help the worker, but the nation as

a whole by ensuring a constant amount for investment purpose.

2. Government should also encourage workers to collect loans from

financial institutions, after a through scrutiny, and serve as the guarantor. In

case of any default, government can easily default at the source of the

respective individual.

3. Business people should device ways of tapping the resources lying

idle in the hand of workers. The little amount in the hands of workers can be

turned into a great venture by effective and efficient business people.

4. Government should make provision for old people. Although pension is

given to those who served and retire there is need to give aged people grant

and also sto those who have never served government.


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5. Workers too should be disciplined in their expenses even though there

is no incentive from government to invest, the little they have should be

spend wisely as this will not only help them, but they too can contribute

towards national development.

6. Workers should not, in any way, think they know it all any time they

intend to embark upon any investment they should seek the advice of

professionals. This will not just help them in gain more about their

investment will not be lost.

Finally, it is strongly believed that if these recommendations are

implemented, the Nigerian worker will be a good investor. And at the same

put in the best he/she has towards the national growth and development.

BIOBLIOGRAPHY

Asika, L. (2006): Research Methodology in the Behavioral Sciences. Ikeja,

Longman Nigeria Plc.

Benton, G. E. (1993): The Basics of Investing. New York, John Wiley &

sons Inc

Briant, P. E. andSylvia, L.(1989): Personal Finance. Second Ed. New


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42

York, John Wiley & sons Inc.

Fischer D. E. and Jordan R. J. (2005):Security Analysis and Portfolio

Management. 8th Ed. New Delhi, Prentice-Hall, Inc.

Gitman, L. J. and Loehnk, M. D. (2008): Fundamentals of Investing.10th

Ed. New York, Pearson International Edition.

Hagin, R. (1979): Modern Portfolio Theory. Illinois, Richard D. IRWIN,

Inc.

Marx, J.(2006):Investment Management. Second Ed. Pretoria, Van schaik

publishers.

Osuala, E. C. (2005): Introduction to Research Methodology. Third Ed.

Onitsha, African-first publishers Ltd

Phillip, L. J. (1984): Investment: The study of an Economics Aggregate.

Vol. 13 Amsterdam, North-Holland Publishing Co.

Sharpe, W. F. et al (2003): Investments.6th

Ed. New Delhi, Prentice-Hall,

Inc.

Sloman, J. (2006): Economics 6th

Ed. England, Prentice-Hall

Spiegel, M.R. (1980): Probability and Statistics. Singapore, McGrew-Hill

Book Co.


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43

ArticleandJournals

Bodie, Z. Crane, D. B. (1997): Personal Investing, Advice, Theory, and

Evidence, Financing Analysis Journal NOV. / DEC.

Farhi, E. and Panageas, W. (2005). Saving and investing for early

Retirement: A theoretical analysis. Available from www.

Ssrn. Com.

Folari, G. et al (1999). Research Guide for Tertiary Institution. Unpublished

material.

Iliya, Y. M. (2008). Factors Affecting Workers Investment Decision In

Nigeria. A Study of ABU, Zaria.

Mallians, A. G. and Mallians, E. M. (2007). Investment Principles for

Individual Retirement Accounts. Available from www

.ssrn. com

Department of Accounting

Faculty of Administration,

A.B.U,

Zaria.

Dear Respondents,

Questionnaire


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The researcher is a final year student of the above addressed

Department currently carrying out a study on the topic investment decision

Among workers in Nigeria.

A case study of A.B.U, Zaria.

You are please requested to supply the necessary answers to the

questions herewith as this will help the researcher. All information provided

shall be treated with utmost confidentially and solely for academic purpose

only.

Thanks for your anticipated cooperation.

Yours Faithfully

Hadiza Ali

STRUCTURE OF THE QUESTIONNAIRE

Section A

1. Sex: (a) Male [ ] (b) Female [ ]

2. Age: (a) 21-30 years [ ] (b) 31-40 years [ ] (c) 41-50 years

[ ] (d) 51 years and above [ ]

3. Marital Status: (a) Married [ ] (b) Single [ ] (c) Divorced [ ]

4. Educational Qualification: (a) Sch. Leaving Certificate [ ]

(b) NCE/OND [ ] (c) B.Sc./HND [ ] (d) Post Graduate [ ]

(e) Others, please specify ____________________

Section B


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5. If you are married, how many dependent (S) do you have?

(a) Nil [ ] (b) 1 3 [ ] (c) 4 6 [ ] (d) 7 9 [ ]

(e) 10 and above [ ]

6. For how long have been in service?

(a) Less than 5 years [ ] (b) 6 10 years [ ] (c) 11 15 years [ ]

(d) 16 20 years [ ] (e) 21 years and above [ ]

7. What is your current grade level?

(a) 01 04 [ ] (b) 05 08 [ ] (c) 09 12 [ ] (d) 13 and above [ ]

8. Are you of the benefits inherent in investment?

(a) Yes [ ] (b) No [ ]

9. What type of investment are you familiar with?

(a) Shares and stock [ ] (b) Real estate and properties [ ]

(c) Precious metals and gels [ ] (d) self owned business [ ]

10. Does the number of your dependents, if any, affect your decision to

invest? (a) Yes [ ] (b) No [ ]

11. Is your monthly earning (salary) enough for you to invest?

(a) Yes [ ] (b) No [ ]

12. Does government give you any allowance / incentive for investment?

(a) Yes [ ] (b) No [ ]

13. Why do you invest?

(a) To increase my wealth [ ] (b) To save for rainy days [ ]

(c) To make name [ ] (d) To create job opportunities [ ]

(e) Others, please specify ________________________________

_____________________________________________________

_____________________________________________________

14. Which other factor (s) affect your decision to invest? __________


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_____________________________________________________

_____________________________________________________

15. In your opinion what are the problem (s) investment among workers

in Nigeria? ____________________________________________

______________________________________________________

16. What can be done to solve the problem (s) mentioned in (14) above?

______________________________________________________

______________________________________________________

______________________________________________________

17. Please suggest on how the research can be improved? __________

_____________________________________________________

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