A STUDY ON WHETHER AGE OR INCOME LEVEL

INFLUENCE THE PATTERN OF SAVINGS AND

INVESTMENT HABITS MADE BY CONSUMER IN MUMBAI
REGION FOR THE FINANCIAL YEAR 2016-17

Chapter
1
2
3
4
5
6
7
8
9

Particulars
Introduction
Review of literature
Research methodology
Analysis
Findings
Conclusion
Recommendation
Reference
Annexure

Pg.No
1
3
5
7
14
15
16
17
18

CHAPTER1- INTRODUCTION
Domestic saving of a nation determines the strength of an economy. Over a decade, saving
behaviour of individuals in small cities and towns has influenced the gross domestic savings
of nations across the globe. These changing saving patterns have an influence on the
investment pattern as well. Hence, to understand these, a study was conducted in Mumbai
city in Maharashtra. The aim of the research was to examine whether the factor such as Age
and Income level make significant impact while deciding on the avenues for saving and
investment done by the consumer in Mumbai region. The present study is based on the
primary source of data which are collected by distribution of a structured questionnaire to 108
respondents. The data has been analyzed by using different tools of tests (chi-square,
correlation, and t-test). The study was based on the response of the respondents i.e those who
are having fixed income per month as well as doing investment in Mumbai city.Money is a
vital part of our life, where people work to earn their necessities. To save means to put aside a
portion of income as deferred for consumption.
A] Saving: Saving means different things to different people. To some it means putting
money in the bank. To others it means buying stocks. But to economists, saving means only
one thingconsuming less in the present in order to consume more in the future.
B] Investment:
An investment is an asset or item that is purchased with the hope that it will generate income
or appreciate in the future. In an economic sense, an investment is the purchase of goods that
are not consumed today but are used in the future to create wealth In finance, an investment is
a monetary asset purchased with the idea that the asset will provide income in the future or
appreciate and be sold at a higher price.

Indias GDP is rate:-

Source: - www.trendingeconomies.com |MINISTRY OF SAATISTICAL AND PROGRAMME

IMPLEMANTATION

From the above graph we can see that the GDP has decreased. Now we will see the saving
rate trends of past.
Country Name
2011
India
31.7
Source: - data.worldbank.org.

2012
29.9

2013
29.3

2014
29.3

As we can see from the above table the saving trends in India has going down year by year.
But today, India is considered as the 4th biggest economy in the world. Its impressive GDP
rate, especially in the fields of purchasing power, has captured it to second position among all
the developing nations.
Stated in live mint E-Paper MARCH 2016, according to IMF, in spite of rising slowly rising
GDP rate for India till 2020, saving and investment rates will be even lower than in 2014

Source- Live mint E-paper (24 march 2016).

Thus, we can state that the savings and investment is going to fall in coming years. So as to
study the current trends of saving habit of consumer we conducted this study to add some
knowledge and understanding in this field.

CHAPTER2-REVIEW OF LITERATURE
Choudhary H,Fattepuria A, Telgote S(2015) stated in his journal Saving and Investment
Pattern Of Private School Teachers that Today, the living standard of the people increasing
day by day so teacher community has started realizing the importance of savings and proper
investment of their savings. It is evident from the study undertaken that most of the teachers
are considered Safety for selecting the mode of savings and Bank Deposit was considered as
the main avenue of the investment followed by Insurance.

SinghaB and Dr.Singhb M (2015)stated in his journalDemographic Influences on Rural

Investors Savings and Investment Behaviour that The age distribution of the population,
coupled with the income levels of the families, is a major determinant of the savings and
investment behaviour of the families in the study area. Age of household head however
influences the households investment in contingent forms probably to secure the future of
other family members in the event of death of the head.
Mr. Sathiyamoorthy. C and Dr. Krishnamurthy. K (2015) stated in his journalInvestment
Pattern and Awareness of Salaried Class Investors in Tiruvannamalai District of Tamilnadu
that salaried class investors are investing the future benefits. They allocate their savings in
various aspects of investment avenues. Most of them will look after the safety of their
investment rather than high returns their study reveals that bank deposit still remains the most
preferred investment avenues of the households. The results also highlight that certain factors
like education level, age of investors, number of family members etc make significant impact
while deciding on the avenues for investment.
Modigliani F (1985) stated in his "life cycle" model of consumption that "his analysis of the
behaviour of household savers." In the early fifties Modigliani Most people, he claimed, want
to have a fairly stable level of consumption. If their income is low this year, for example, but
expected to be high next year, they do not want to live like paupers this year and princes next.
So in high-income years, Modigliani argued, people save. They spend more than their income
in low-income years. Because income begins low for young adults just starting out, then
increases in the middle years, and declines on retirement, said Modigliani, young people
borrow to spend more than their income, middle-aged people save a lot, and old people run
down their savings....
According to Warren Buffet, As richest person, if a person has to become a millionaire at the
age of 65, then he has to save $10 per day if he is at the age of 25. If he has 35 years old, he
must save $22 in a day. If he is at the age of 45, his savings requirement is $55 per day. If he
waits until the age of 55, he has to save $182 per day. He assumes the saved amount of
money generate 8% returns per year. This example shows the importance of savings in ones
life. The importance of savings may be analyzed on the basis of the reasons by which people
are induced to save.

GAP:
Until now there has been no research study done on factors affecting saving and investment
decision in Mumbai region for the financial year 2016-17.Thus to examine which factors
exactly affects savings and investment decision of consumer in financial world.

CHAPTER3 RESEARCH METHODOLOGY

3.1-

RESEARCH PROBLEM STATEMENT- TO STUDY WHETHER AGE OR

INCOME LEVEL INFLUENCE THE PATTERN OF SAVINGS AND INVESTMENT

HABITS MADE BY CONSUMER IN MUMBAI REGION FOR THE FINANCIAL
YEAR 2016-17.
3.2- OBJECTIVEa) To evaluate whether Age plays a role in savings activity of consumer.

b) To examine whether there is a relationship between saving investment with Income level.
c) To determine the exiting pattern of savings made by them.
3.3- HYPOTHESIS
Ho- There is no relationship between age or income level and savings investment activity.
Ha- There is a relationship between age or income level and savings investment activity.
(Further we have separated our both variable i.e. Age with income and savings with
investment)
3.4- RESEARCH DESIGN- A research design is simply the framework or plan for a study
that is used as a guide in collecting and analyzing the data. It is a blueprint that is followed in
completing a study. Here we have used CAUSAL Research also called as explanatory
research. We have used this design because we are doing the investigation of age and income
level with the saving and investment pattern of consumer that whether there is a relationship
or not. Thus our data is based on quantitative factors like age. Income level.
3.5- SAMPLING UNIT- For collection of data, sample unit was choosen. This sampling unit
specifically chosen for the research was people those who are working and earning a fixed
income per month as well as they are doing some kind of investment.we prepared a stuctured
questionnaire and sent to our respondents online using Google Forms and we received total
108 responses.
Sample Size- The sample size of our study is 106.
Sampling Technique- For our study we have used Quota sampling. Because at stage 1 we
developed quota of people those who are working and doing investment from Mumbai
region, and in stage 2 we selected samples randomly as per our judgement and convenience.
LOCATION OF THE STUDY-MUMBAI was our location of the study.
PRIMARY DATA- The primary data was collected directly from the sample through a welldesigned questionnaire. Incomplete and inaccurate responses were dropped out, upon the
respondents having select saving and investment pattern of salaried class in Mumbai.
SECONDARY DATA- we collected all the secondary data from books, journals, research
articles, E-papers, and websites.

TIME PERIOD- the time period of our study is FEBRURAY and MARCH 2016-17.
LIMITATION-There was lack of time to conduct the study. As our respondents are all
working people they were not able to give proper response because of their tight working
schedule. The study was based on the working people therefore there was restriction the
number of respondents. The human error is also considered.

CHAPTER4- ANALYSIS

Hypothesis:
1) Ho: There is no association between Age and Investment made by people.
2) H1: There is an association between Age and Investment made by people.

Level Of Significance:
5% = 0.05

Chi-Square test:

Table 4.1:- Chi-Square Tests

Value

df

Asymp. Sig. (2sided)

Pearson Chi-Square

44.079a

30

.047

Likelihood Ratio

35.020

30

.242

4.032

.045

Linear-by-Linear Association
N of Valid Cases

106

Source:- Primary data

Interpretation: From the above table, it can be seen that critical value is 0.047 which is
lesser than level of significance i.e. 0.05 at 95 % Confidence level.
Therefore we accept our alternate hypothesis and conclude that there is an association
between Age and Investment made by people.

Crosstab: 4.1
15-25
26-36
37-47
48-58
59 above
Total
Source: - Primary data

Graph: 4.1

Yes
6
4
0
3
1
14

No
59
17
11
5
0
92

Total
65
21
11
8
1
106

Source: - Primary data

Analysis:
Hypothesis:
1) Ho: There is no association between Age and savings made by people.
2) H1: There is an association between Age and savings made by people.

Level Of Significance:
5% = 0.05

`Chi-Square test:
Table4.2 Chi-Square Tests

Value

df

Asymp. Sig. (2sided)

Pearson Chi-Square

229.397a

186

.017

Likelihood Ratio

147.644

186

.983

3.531

.060

Linear-by-Linear
Association
N of Valid Cases

106

Source: - Primary data

Interpretation: From the above table, it can be seen that P value is 0.017 which is lesser
than level of significance i.e. 0.05 at 95% Confidence level. Therefore we accept our alternate
hypothesis and conclude that there is an association between Age and Savings made by
people.

Crosstab: 4.2
Age
15-25
26-36
37-47
48-58
59 above
Total

Purchas
e of
property
31
8
4
1
1
45

Source: - Primary data

Further
Educatio
n
11
2
0
2
0
15

Marriag
e

Child
Planning

Health
Care

13
4
2
0
0
19

2
3
2
0
0
7

2
2
3
5
0
12

Home
Insuranc
e
3
0
0
0
0
3

Other

Total

3
2
0
0
0
5

65
21
11
8
1
106

Graph: 4.2-

Source: - Primary data

Analysis:
Hypothesis:
1) Ho: There is no relationship between Annual income and reason to invest money.
1) H1: There is relationship between Annual income and reason to invest money.

Level Of Significance:
5% = 0.05
Paired t Test:
Table4.3Paired Samples Test
Paired Differences
Mean
-.632

Source: - Primary data

Std. Deviation
2.153

df

Sig. (2-tailed)

Std. Error Mean

.209

-3.023

105

.003

Interpretation: From the above table, it can be seen that P value is 0.03 which is lesser
than level of significance i.e. 0.05 at 95% Confidence level with.
Therefore we accept our alternate hypothesis and conclude that there is relationship between
Annual income and reason to invest money.

Crosstab: 4.3

Reason to Invest the money?

Total

Grow

Save for

Earn higher

Reach

Support

Reduce

Money

retirement

returns

financial

family

Taxable

goals
Below 1

others

Income

30

1 - 2 Lakh

22

2 - 3 Lakh

25

3 - 4 Lakh

17

12

22

15

21

17

26

106

Lakh

4 Lakhs and
above
Total

Source: - Primary data

Graph: 4.3
18
16
14
12
10
8
6
4
2
0

below 1 lakh
1_2 lakh
2_3 lakh
3_4 lakh
4 lakh and above

Source: - Primary data

Analysis:
Hypothesis:
1) Ho: There is no relationship between Annual income and reason for saving.
2) H1: There is relationship between Annual income and reason for saving.

Level of Significance:
5% = 0.05
Paired t Test
Table4.4Paired Samples Test
Paired Differences
Mean

Std. Deviation

Sig. (2-tailed)

Std. Error Mean

Annual income is in the range

of? - Which of the following
future events do you want to

.057

2.056

.200

.284

save for?

Source: - Primary data

Interpretation: From the above table, it can be seen that P value is 0.777 which is greater
than level of significance i.e. 0.05 at 95% Confidence level with.
Therefore we reject our alternate hypothesis and conclude that there is no relationship
between Annual income and reason for saving.

.777

Crosstab: 4.4
Annual income is in the range of? * Which of the following future events do you want to save for? Cross
tabulation

Count
Which of the following future events do you want to save for?

Below 1
Lakh
1-2
Lakh
Annual income is in the range
of?

2-3
Lakh
3-4
Lakh

Total

Purchase of

Further

Marriag

Child

Health

Home

other

property

Education

planning

care

Insurance

16

30

22

13

25

17

12

46

14

19

11

106

4 Lakhs
and
above
Total

Source: - Primary data

Graph: 4.4
18
16
14
12
10
8
6
4
2
0

below 1 lakh
1_2 lakh
2_3 lakh
3_4 lakh
4 lakh and above

Source: - Primary data

CHAPTER5- FINDINGS
1) From our study we found that 96% of the people have bank account, most
proffered saving done by them is in bank account other major saving and
investment avenue is done in Gold/silver.
2) 40% people save less than 10% of their income.
3) 47% people save for purchasing property and 13% save for their further
education, rest save for their marriage.
4) Among all the respondents only 25% are currently paying EMI.
5) 56% people monitor their savings and investment monthly and 37%
monitor occasionally.
6) 50% people save for medium term and 33% for short term rest all people
save for long term.
7) 70% of peoples decision in saving and investment affect due to their
level of income.

CHAPTER6- CONCLUSION
There is a relationship between age with saving and investment made by people.
Also there is a relationship between individuals income level and investment
done by them. According to the study there is no relationship between income
level and savings. The present study is based on primary source of data which
are collected by distribution of structured questionnaire.

CHAPTER7- RECOMMENDATION

The study reveals that most of the salaried investors prefer Bank deposits,
as the investment option, there is lack of awareness about other avenues
like shares, debentures, and mutual fund etc. so if they want to invest in
them they should regularly read newspapers, and articles related to other
avenues.
We also recommend that in order to avoid risk of incurring loss in
investment consumer should also park their part of income in savings as
there is no chance of losing the principal amount.

CHAPTER8- REFERENCE
1.

Choudhary H, Fattepuria A, TelgoteS(June,2015).Saving and Investment Pattern Of Private

School Teachers From http://www.ijarcsms.com/docs/paper/SplIssue/ICQUEST_July2015/ijarcsms12.pdf

2.

Singha B and Dr.Singhb M (September,2015).Demographic Influences on Rural Investors

Savings and Investment Behavior ,From http://jms.nonolympictimes.org/Articles/JMS-Sep-

3.

2015-Vol-5-No-3-Art-7.pdf
Mr. Sathiyamoorthy. C and Dr. Krishnamurthy. K (April,2015).Investment Pattern And
Awareness Of Salaried Class Investors In Tiruvannamalai District Of Tamilnadu,

4.

Fromhttp://apjor.com/downloads/2206201510.pdf
Modigliani F (1985).life cycle model of consumption

5. RAO A(2008).Research Methodology:New delhi:Excel Books.

Annexure-1
1. Occupation
a) Government employee
b) Pvt. Firm employee
c) Professionals (doctor, CA, Advocate, Home tutor Etc)
d) Business Person
e) Other
2. Annual income is in the range of?
Below 1 lakh
a) 1-2 lakh
b) 2-3 lakh
c) 3-4 lakh
d) 4 lakhs and above
3. Do you have a bank account?
a) Yes (if yes go to question no.4)
b) No
4. Which type of bank account?
a) Savings A/c
b) Current A/c
c) Salary A/c
d) Recurring A/c
5. While opening an account which factor you prefer?
a) Convenience
b) Customer safety
c) Interest rates
d) Market value
e) Authorized
f) Other
6. Where do you invest your savings?
a) Savings in bank
b) Gold/silver
c) Mutual funds
d) Insurance
e) Stock market
f) Commodity market
g) Postal savings
h) EPF and PPF
i) Bonds
j) Real estate
k) Fixed deposit
l) Other

7. What percent of your salary you invest monthly?

a) Less than 10%
b) 10-20%
c) 25-50%
d) More than 50%
8. Which of the following future events do you want to save for?
a) Purchase of property
b) Further education
c) Marriage
d) Child planning
e) Health care
f) Home insurance
g) Other
9. Are you currently paying EMI for any loans taken?
a) Yes (if yes go to Q.10)
b) No
10. Mention loan type
11. Do you invest your money in share market?
a) Yes (if yes go to Q.12)
b) No
12. Imagine that stock market drops down after you invest, then what will you do?
a) Withdraw your money
b) Wait to increase and invest more
c) After increasing you will withdraw
13. How often do you monitor your savings and investment?
a) Daily
b) Monthly
c) Occasionally
14. What is the time period you prefer for saving and investment?
a) Short term (0-1year)
b) Medium term (1-5year)
c) Long term (5-7 and more year)
15. What are the factors from the following which you think will affect your investment
decision?
a) Stock market movement
b) Level of income
c) Government policies
d) Fluctuations in the prices of gold
e) Other

16. Reason to invest the money?

a) Grow money
b) Save for retirement
c) Earn higher returns
d) Reach financial goals
e) Support family
f) Reduce taxable income
g) Other
17. Age
a) 20-30
b) 30-40
c) 40-50
d) 50and above
18. Name ____________
19. Gender
a) Male
b) Female