ANALYSIS OF INVESTMENTS BY WORKERS: A STUDY OF ABU CONGO CAMPUS

CHAPTER ONE: INTRODUCTION 1.1 BACKGROUND OF THE STUDY 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

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

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 STATEMENT OF THE PROBLEM 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.

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 OBJECTIVES OF THE STUDY The following are the objectives of this research. 1. To find out the factors affecting workers investment decision in A.B.U. Congo campus,Zaria. 2. To find ways of encouraging workers to invest part of their monthly/annual income. 3. To find out various investments undertaken by workers of Congo campus.

1.4 STATEMENT OF HYPOTHESIS In carrying out this research, two hypotheses shall be stated: Hypothesis one Ho: salary does not affect workers decision to invest.

H1: salary affects workers decision to invest.

Hypothesis two Ho: Number of dependents does not affect workers decision to invest. H1: Number of dependents affects workers decision to invest.

1.5 SCOPE OF THE STUDY 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 SIGNIFICANCE OF THE STUDY 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

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.

CHAPTER TWO 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 CONCEPT OF INVESTMENT 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

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.

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 TYPES OF INVESTMENT 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) securities or properties These 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

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) Direct Or Indirect A 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, Equity Or Derivation Usually, 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) Low Or High Risk Investments 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. Highrisk investments are considered speculative; their levels of income and future are highly uncertain. 5) Short or Long Term investment The 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 DECISION

FACTORS AFFECTING INDIVIDUAL INVESTMENT

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, Bryant and Sylvia (1989) summarized the major constraints as follows

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1)

Ability to risk loss of investment income and principal. This in turn is influenced by a number of personal factors such as: a) b) c) d) Earnings and the nature and ability of employment; Other sources of income; Age, health, family responsibilities and other obligations, Overall assets, liabilities and net worth position (personal balance sheet): e) Whether one has closely held business interests or other relating non-marketable assets; f) Plans to use investment principal for particular purpose, such as educational expense, retirement, failure gifts, and estate settlement cost; g) The extent to which one needs current living investment income for 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 in portfolio.

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3)

How well one is able to withstand the ups and particularly the downs in 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 and estate tax positions.

5)

The quality of investment management services available to the investors.

6)

Investors attitude and emotional tolerance for risk.

2.5

PRINCIPLES OF INDIVIDUAL INVESTMENT 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 safe assets. 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 equities and 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 held outside 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 asset classes, 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 price

There 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 Always

Every 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 Cost

Investors 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 INTRODUCTION

This 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

21

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 closeended 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 Male Female Total No of respondents 20 10 30 Percentage (%) 66 34 100

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 Options 21 30 No of respondents 3 Percentage (%) 10

25

31 40 41 50 51 and above Total

10 12 5 30

33 40 17 100

SOURCE: Questionnaire administered 2011 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 Options Married Single Divorced Total No of respondents 24 5 1 30 Percentage (%) 80 17 3 100

SOURCE: Questionnaire administered 2011 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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Options School certificate NCE/OND B.Sc./HND Post graduate Total

No of respondents 5 14 6 5 30

Percentage (%) 17 46 20 17 100

SOURCE: Questionnaire administered 2011 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 Option Nil 13 46 79 Number of Dependent (s) No of respondents 0 6 12 8 Percentage (%) 0 20 40 27

27

10 and above Total

4 30

13 100

SOURCE: Questionnaire administered 2011 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 Less than 5 6 10 11 15 16 20 21 and above Total Number of respondents 2 4 5 9 10 30 Percentage (%) 7 13 17 30 33 100

SOURCE: Questionnaire administered 2011

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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 Options 01 04 05 08 09 12 13 and above Number of respondents 2 16 7 5 Percentage (%) 7 53 23 17

29

Total

30

100

SOURCE: Questionnaire administered 2011 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 Yes No Total 23 7 30 Percentage (%) 77 23 100

SOURCE: Questionnaire administered 2011

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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 respondents Shares and stocks Real Estate and Properties Precious Stones and Gels Self-owned business All of the above 11 5 2 4 8 37 17 7 13 26 of Percentage

31

Total

30

100

SOURCE: Questionnaire administered 2011 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: Whether number of dependents affects decision to invest Options Yes No Number of respondents 19 11 Percentage (%) 63 37

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Total

30

100

SOURCE: Questionnaire administered 2011 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: Whether salary is Enough for one to Invest Options Yes No Total Number of respondents 9 21 30 Percentage (%) 30 70 100

SOURCE: Questionnaire administered 2011 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: Whether Government gives any incentive for investment Options Yes No Total Number of respondents 4 26 30 Percentage (%) 13 87 100

SOURCE: Questionnaire administered 2011 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: Reasons for investment Option To increase wealth To save for rainy days No of respondents 7 13 Percentage (%) 23 43

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To make name To create job opportunities Total

2 8 30

7 27 100

SOURCE: Questionnaire administered 2011 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

35

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 21

15 15

-6 6

36 36

2.4 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

36

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 11 15 15 4 -4 16 16 1.07 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

39

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. and Sylvia, L.(1989): Personal Finance. Second Ed. New

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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. Preto ria, 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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Article and Journals 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. 2. Sex: Age: (a) Male [ ] (b) Female [ ]

(a) 21-30 years [ ] (b) 31-40 years [ ] (c) 41-50 years

[ ] (d) 51 years and above [ ] 3. 4. Marital Status: (a) Married [ ] (b) Single [ ] (c) Divorced [ ] (a) Sch. Leaving Certificate [ ]

Educational Qualification:

(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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