International Journal of

Business & Management Studies

ISSN 2694-1430 (Print), ISSN 2694-1449 (Online)
Financial Literacy and Personal Investment Decision: SEM Approach for Employees of Central Bank of Nigeria



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.