Abstract
This study examines the effect
of financial literacy on personal investment decisions, using structural
equation modeling for a sample of 150 employees of Nigerian Central Bank. The
results show that financial knowledge has an influence on retirement planning
but not too significant. Also, financial knowledge has a weak
positive/insignificant relationship with portfolio choice. However, the study
reveals that financial behavior and retirement planning have a
positive/significant bidirectional relationship while also; there is a
positive/relatively significant relationship between financial behavior and
portfolio choice. Therefore, the researcher recommends as follows: employees of any organizations should
identify detestable financial behavior, for an understanding of one’s finances
and its application in day to day activities are inevitable; and veritable
measures to cultivate sound financial behavior.
People should develop policy that encourages spending only on those
things that sustain positive marginal utility. Employees of all levels/cadres
should endeavor to invest in gilt-edged investments such as real estate,
government securities and stocks of globally reputable companies that have
lived for more than 50 years. Employees should endeavor to broaden their
financial knowledge by regularly attending symposiums, seminars and conferences
on financial matters.
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