Personal financial planning and family f PDF

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A STUDY ON THE PRACTICE OF PERSONAL FINANCIAL PLANNING AND FAMILY FINANCIAL INVESTMENT IN KUALA LUMPURHAWA YUSUF MOHAMEDSUPERVISED BY: ASSO.PROF. MANJARI SHARMAPROJECT SUBMITTED IN PARTIAL FULFILMENT FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATIONFACULTY OF BUSINESS & ACCOUNTANCY LINCOLN...

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A STUDY ON THE PRACTICE OF PERSONAL FINANCIAL PLANNING AND FAMILY FINANCIAL INVESTMENT IN KUALA LUMPUR

HAWA YUSUF MOHAMED

SUPERVISED BY: ASSO.PROF.DR. MANJARI SHARMA

PROJECT SUBMITTED IN PARTIAL FULFILMENT FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION

FACULTY OF BUSINESS & ACCOUNTANCY LINCOLN UNIVERSITY COLLEGE MALAYSIA

JUNE 2016 1

A STUDY ON THE PRACTICE OF PERSONAL FINANCIAL PLANNING AND FAMILY FINANCIAL INVESTMENT IN KUALA LUMPUR HAWA YUSUF MOHAMED 0123150511345

SUPERVISED BY: ASSO.PROF.DR. MANJARI SHARMA

PROJECT SUBMITTED IN PARTIAL FULFILMENT FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION

FACULTY OF BUSINESS & ACCOUNTANCY LINCOLN UNIVERSITY COLLEGE MALAYSIA

JUNE 2016 2

Certification of project work

I have seen and read the final draft of the below student‘s project paper and, in accordance with the requirement of the faculty guidelines certify that: I am satisfied that this thesis, prima facie, is worthy of examination both in terms of its content and its technical.

Date: Signature

Supervisor: Asso. Prof. Dr. Manjari Sharma

:

Name: Hawa Yusuf Mohamed

Department of Business Administration

Matric No: 0123150511345

Faculty of Business and Accountancy Lincoln University College, Malaysia

Prof. Dr. Abhijit Ghosh

Dean Faculty of Business and Accountancy Lincoln University College, Malaysia

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Declaration

I hereby declare that this thesis is based on my own independent work, except for quotation and summaries which have been dully acknowledged. I also declare that no part of this work has been submitted for any degree to this or any other university. HAWA YUSUF MOHAMED Signature: …………………. Date: June 23, 2016

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PERMISSION TO USE

In presenting this project submitted in partial fulfillment for the degree of master of business administration faculty of business and accountancy in Lincoln University College Malaysia, I agree that the University Library make it freely available for inspection. I further agree that permission for copying of this project in any manner, in whole or in part, for scholarly purpose may be granted by my supervisor or, in his absence by the Dean Faculty of Business and Accountancy.

It is understood that any copying or publication or use of this project or parts thereof for financial gain shall be given to me and to Lincoln University College for any scholarly use which may be made of any material from my project. Request for permission to copy or make other use of materials in this project paper, in whole or in part should be addressed to: Dean of Faculty of Business and Accountancy.

Mayang Plaza Block A, 1, Jalan SS 26/2, Taman Mayang Jaya, 47301 Petaling Jaya, Selangor, Malaysia.

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ACKNOWLEDGMENT

Firstly, thanks to the almighty Allah (S.W.T), for His providence and protection throughout my years of study and for His showers of blessings throughout my research work to complete the research successfully. Secondly, there are no proper words to convey my deepest gratitude and respect for my thesis and research supervisor ASSO.PROF. DR. MANJARI SHARMA, for her invaluable suggestions, inspiring guidance, encouragement, supervision and generous support given to me for the successful completion of my thesis. Thirdly, I would like to thankful LINCOLN UNIVERSITY COLLEGE and the Librarians at Lincoln, There is no way to express how much it meant to me to have been a student at LINCOLN UNIVERSITY COLLEGE ,Not forgetting to thanks all my lecturers. And my dear classmates. I always fall short of words and felt impossible to describe my family especially to my dearest sister Halima Yusuf Mohamed for her support and love. Finally my special appreciation is also due to my beloved husband Abdulkadir Farah wali for his loving, helping, advice and financial support.

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DEDICATION

I dedicate this thesis to my parents.my beloved father Yusuf Mohamed Adam and my sweet mother Anbara Rabah Ubahle.

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ABSTRACT

This research investigates the practice of personal financial planning among individuals and households in Kuala Lumpur. The objective of project is to examine whether practice of personal financial planning has significant influence of family financial investment in Kuala Lumpur according to their demographic characteristics and to explore the key factors that influence family financial investment and to examine the relationships and significant of these independent variables; practice of personal financial planning, knowledge of personal financial planning, financial literacy, strategic investment planning, cultural influence on personal financial planning in determining the family financial investment . Questionnaires were sent to 122 respondents at different public area in Kuala Lumpur as a quantitative research. The analysis result shows that the family financial investments were strong significantly related to knowledge of personal financial planning, financial literacy, and cultural influence on personal financial planning where the strategic investment planning and practice of personal financial planning were not significantly related to family financial investment . The implication of the findings is that household should be exposed with some financial knowledge to encourage them to have financial investment for the family as well as for their future. Keywords: financial plan, practice of personal financial planning, knowledge of personal financial planning, financial literacy, strategic investment planning, cultural influence on personal financial planning and family financial investment

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Co Conte nte ntent nt ntss Certification of project work ......................................................................................3 Declaration .................................................................................................................4 PERMISSION TO USE .............................................................................................5 ACKNOWLEDGMENT............................................................................................6 DEDICATION ...........................................................................................................7 ABSTRACT ...............................................................................................................8 CHAPTER ONE ......................................................................................................15 CHAPTER ONE ......................................................................................................16 1.0 INTRODUCTION .............................................................................................16 1.1 Problem statement ..............................................................................................17 1.2 Objectives of research ........................................................................................18 1.2 Research question ..............................................................................................18 1.4 Scope of the Study .............................................................................................19 1.5

Significance of the Study................................................................................19

1.6.1Family financial investment .............................................................................19 1.6.2 Practice personal financial planning .............................................................................................. 20

Definition of personal finance .................................................................................20 Among the most significant features of personal finance are: ................................................................ 20 1.6.3 Knowledge of personal financial planning .................................................................................... 20 1.6.4 The Concept of Financial Literacy................................................................................................. 21 1.6.5 Strategic investment planning ........................................................................................................ 21 1.6.6 Cultural influence on personal financial planning ......................................................................... 21

1.7 Conclusion .........................................................................................................22 Chapter two ..............................................................................................................24 Literature review ......................................................................................................24 2.0 Introduction: .......................................................................................................24 2.1 finding literature review .....................................................................................26 9

2.2. among grounded theories of this research ........................................................30 2.2.1Theory one ...................................................................................................................................... 30 2.2.2 Theory two ..................................................................................................................................... 31 2.2.3 Theory three ................................................................................................................................... 31 2.2.4 Theory four .................................................................................................................................... 31 2.2.5 Theory five ..................................................................................................................................... 31 2.2.6 Theory six ...................................................................................................................................... 32

2.3 Personal financial planning in Malaysia ............................................................32 2.3.1

Personal Finance ..................................................................................................................... 32

2.4Financial literacy .................................................................................................34 2.4.1Components of Financial Literacy .................................................................................................. 34 2.4.2

Core Competencies ................................................................................................................. 35

2.4.3 expressed Mathematical skills/Ability ........................................................................................... 35 2.4.4 Budgeting Planning ........................................................................................................................ 35 2.4.5 Saving ............................................................................................................................................ 36 2.4.5.1

Make Saving a Priority ........................................................................................................... 36

2.4.6 Borrowing ...................................................................................................................................... 36 2.4.7 Investing ......................................................................................................................................... 37 2.4.8 Proficiency. .................................................................................................................................... 37 2.4.9 Skill and confidence....................................................................................................................... 37 2.4.10 Opportunity to Acquire and Use Competency and Proficiency ................................................... 38 2.4.11 Measuring Financial Literacy ...................................................................................................... 38 2.5 Knowledge of personal financial planning ....................................................................................... 39

2.6 strategic investments planning .........................................................................40 2.6.1 Predictable returns ......................................................................................................................... 41 2.6.2 Predictable risk............................................................................................................................... 42 2.6.3 Investment constraints ................................................................................................................... 42 2.6.4 Business structures ......................................................................................................................... 43 2.6.5 Types of Investment Strategies ...................................................................................................... 43

2.7 culture influence on personal financial planning ...............................................44 2.7.1Multicultural Society ...................................................................................................................... 45 2.7.2 Respect for all ................................................................................................................................ 46 10

2.7.3 Why culture can matter for finance................................................................................................ 47

2.8 Family financial Investments .............................................................................48 2.8.3

Factors to Consider Before Making a Family Investment ...................................................... 49

2.8.4 Preparing for higher education Investment Plans .......................................................................... 49 For children investment education needs to invest: ................................................................................ 50

2.8.5 A Family financial roadmap: ..........................................................................51 2.8.6 Family financial investment planning ............................................................................................ 51

CHAPTER THREE..................................................................................................53 RESEARCH METHODOLOGY.............................................................................53 CHAPTER THREE..................................................................................................54 RESEARCH METHODOLOGY.............................................................................54 3.0 Introductions ......................................................................................................54 3.1 Research methodology .......................................................................................54 3.2 The Importance of Quantitative method: ...........................................................55 3.3 Research Design.................................................................................................56 3.4 Theoretical frame work ......................................................................................56 3.4.0 Development model ........................................................................................57 3.5 Hypothesis ..........................................................................................................57 3.6 Field works .........................................................................................................58 3.7. Variables and measurement ..............................................................................59 3.7.0 Demographic characteristics of the Respondents ...........................................59 3.7.1 Family Financial Investment.......................................................................................................... 59 3.7.2 Practice of personal financial planning .......................................................................................... 60 3.7.3 Knowledge of personal financial planning .................................................................................... 60 3.7.4 Financial literacy ............................................................................................................................ 61 3.7.5 Strategic investment planning ........................................................................................................ 62 3.7.6 Cultural influence on personal financial planning ......................................................................... 62

3.8 Data Collection Method .....................................................................................63 3.8.1 Primary Data .................................................................................................................................. 63 3.8.2Secondary data ................................................................................................................................ 63 11

3.9 Sample profile ....................................................................................................63 3.9.1 Sample Size.................................................................................................................................... 64 3.9.2 Sampling Technique ...................................................................................................................... 64 3.10 The pilot study ................................................................................................................................ 64

3.11 Data Analysis ...................................................................................................64 3.12 Descriptive Statistics ........................................................................................64 CHAPTER FOUR ....................................................................................................66 DATA ANALYSIS ..................................................................................................66 Chapter four .............................................................................................................67 Data analysis ............................................................................................................67 4.0 introduction ........................................................................................................67 4.1 frequencies analysis ...........................................................................................68 4.1.1 Gender ............................................................................................................................................ 68 4.1.2 Respondent Ethnic ......................................................................................................................... 68 Table 2: Ethnic ........................................................................................................................................ 68 4.1.3 Respondent Age ............................................................................................................................. 69 Table 3: Age............................................................................................................................................ 69 4.1.4 Respondent education .................................................................................................................... 69 Table 4 EDUCATION LEVEL.........................................