CHAPTER I

INTRODUCTION

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INTRODUCTION

Saving means sacrificing the current consumption in order to increase the living
standard and fulfilling the daily requirements in future. As circulation of blood is
necessary for the survival of the individual in the same way savings are also necessary
for unpredictable future in order to meet the emergencies in life. While investment is
an economic activity of employment of funds with the expectation of receiving a stream
of benefits in future. It includes the aim of achieving additional income or growth in
the value employed. The essential quality of income is that, it involves waiting for a
reward. It involves the commitment of resources which have been saved or put away
from current consumption in the hope that some benefits will occur in future.

The term investment does not appear to be a simple as it has been defined.
Investment has been categorized by financial experts and economists. To the financial
expert investment involves the allocation of monetary resources to assets that are
expected to yield some gain or positive return over a given period of time. These assets
range from safety investment to risky investments. To the economists, investments
means the net additions to the economy’s capital stock which consists of goods and
services that are used in the production of other goods and services.

In today’s scenario there has been a major change in economic prosperity all
over. The entire world talks about the robust growth rates in this part of the world.
Higher income levels and booming stock markets have led to more and more numbers
of high net worth savers and investors. This means the availability of huge investible
surplus. In India also the socio-economic profile of the people changes dramatically.
Today people are not only spending on products and services earlier considered as
luxury, but are also looking at smarter ways of investing their money. This is mainly
due to the fact that they have many investment options and also more educated and
aware about their choices. So they are now moving beyond traditional ways of savings
to wider investment options.

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1.1 REVIEW OF LITERATURE

 Shantilal Sarupria (1963) in the study captioned “Individual Savings in an

under Development Economy-India-A Case Study” has made an attempt to
disprove certain widely held views about the individuals ‘savings behaviour in
an under developed country like India and suggested the ways of potential
savings which could be mobilized for investment. It was regrettably contended
that a large section of our population held the savings in the form of gold, landed
property and other unproductive assets.

 Stovic Paul (1972) in his study entitled “Psychological Study of Human

Judgment: Implications for Investment Decision Making” examined the use
of psychological approach in the field of financial decision making. According
to him many decisions were made not by individuals but by groups. The
ultimate finding was that decisions made by groups were riskier than the
average of the individual member‘s decision.

 Lease Ronald et.al. (1974) carried out a study entitled “The Individual
Investor Attributes and Attitude” studied the demographic characteristics,
investment strategy patterns, informative sources, assets holdings, market
attitudes and perception of investors. The study also analyzed the records of
portfolio position and realized investment returns of the group. The samples of
the study which comprise 990 investors stratified according to the geographical
distribution of all the American shareholders as reported by the ―New York
Stock Exchange‖ were surveyed. The data for the study were collected through
a questionnaire and it was processed with the help of a cluster analysis and
automotive interaction detection analysis. The study revealed that there was a
significant positive correlation between Individual income and total wealth Age
and percentage of portfolio invested in income securities. Analyzing the
investment strategies of the selected group, the study found that long term
capital appreciation was the prime investment concern with dividend and
intermediate term gains running second and short term gains ranking third in
the list. A significant negative correction existed between annual income and
percentage of portfolio invested in income securities.

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 Bhagawati Prasad and Subhas. M.S (1991) in their study entitled, “Problems
faced by the Investors” have examined the problems faced by the investors by
surveying 200 small investors. The study reveals that majority of the investors
in the middle income group were very active. High returns motivated them to
invest in capital market and majority of the shareholders were not satisfied with
the content of published information.

 Shanmugam.R and Muthusamy.P (1998) in their article entitled “Decision

Process of Individual Investors” studied the views of individual share
investors on their investment objective basis, approach to investment decisions
and the nature of their equity portfolio. 201 investors of Coimbatore city were
selected at random and interviewed. Chi-square test and analysis of variance
were used to analyze the data. The study revealed that, majority of the
shareholders was young first generation investors belonging to the salaried
class. The time spent on investment analysis was inadequate and equity
portfolio diversification was moderate. Regional industry had its impact on
industrial portfolio. The educational level of investors had its impact on the use
of technical analysis and the occupational category had an impact on the use of
fundamental approach.

 Aldus Salam and Ummal Kulsun (2002) in their article “Savings Behaviour
in India: An Empirical Study” identified that the household sector savings
provided the bulk of National Savings. The growth of income is not an effective
instrument to influence the savings rate. The favourable macro-economic
environment supported by strong structural reforms including liberalisation of
financial markets, should help domestic savings to increase substantially.

 Rajarajan.V (2003) in his article titled “Investors Demographics and Risk

Bearing Capacity” brought out the existence of association between
demographic characteristics and the risk bearing capacity of Indian investors.
The relationship between age, income and the risk bearing capacity of the

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 investors are very high. The salaried members constituted the largest part of all
risk categories.

 Challan G.V (2003) in his article “Investors Behavioural Pattern of

Investment and their Preference of Mutual Funds” found that a majority of
the investors prefer real estate investments followed by mutual fund schemes,
gold and other precious metals. The employees invest more in real estate assets
followed by household sector. Most of the investors like to invest in debt
instruments owing to their assured and risk free return. It is also found that a
majority of the investors are very much interested in investing in growth
schemes to take the reinvestment benefits rather than the regular dividends.

 Jospal Singh (2006) in his study titled “A Study about the perception of
Small Investors” a primary survey of 400 investors were conducted. The study
found that among various avenues of investments, the mutual funds obtained
the lowest preference by most of the investors.

 S.Kalavathy (2009) in her work titled “A Study on the Savings and

Investment Behaviour of Salaried Persons” stated that the current study is
divided into two sections. The first section elucidates the awareness of savings
and Investment modes and factors influencing the savings and investments, the
second section discusses on their preferences, perceptions and satisfaction
towards the savings and investment avenues. It has been found that with the
proportion of population, the working age group of 15-64 years is also going to
increase in future, the demographic extra savings are also likely to increase. The
study shows growth in real interest rate, growth in per capita income, spread of
banking facilities and the rate of inflation as statistically significant positive
influence on domestic savings.

 Dr.Sunny Kutty Thomas and M.N. Rajesh (2009) in their article entitled
“Investment Pattern of Rural Investors in Kerala” suggested that Liquidity
and safety should be the prime factors while making investments. Economic
condition and market situation should be properly evaluated while making

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 investments and the investors should adopt a diversified and liquidity oriented
approach while constructing and managing the portfolio for investment.
Systematic risk can be minimized by a detailed analysis of economic situation
and market condition while making investment and unsystematic risk of the
investment can be minimized by way of a detailed analysis of financial
statement of concern, government policies and strategies, past history of the
concern and the financial management system of that concern.

 Sanjay Kanti Das (2012) in his article entitled “Middle Class Household’s
Investment Behaviour: An Empirical Analysis” the study reveals to know
whether there has been any increase in their savings & if so, the reasons for the
same. The present study is based on primary sources of data which are collected
by distribution of a close ended questionnaire to 180 respondents out of which
150 respondents have replied and the data has been analyzed using simple
statistical tools and to access the significance/ association between dependent
variables. It is also observed that most of the respondents show their keen
interest towards the insurance products so as to get tax benefits, life protection
and average profitable investment avenues. Further, it is observed that the level
of income also influences the investment decisions. Higher income group shows
relatively high preference towards investment in share market conversely lower
and average income group shows keen preference towards insurance and banks
as the most preferred investment avenues.

1.2 STATEMENT OF THE PROBLEM

Saving is very important activity for anyone as it secures the future from the
uncertainties. So, savings are very much required to meet the financial requirements.
This study is conducted to know about the savings and investment of teachers in self-
financing colleges in Changanasserry municipality. As they have less salary than
teachers in regular colleges it is important to know about their savings and investments.

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1.3 SIGNIFICANCE OF THE STUDY:

Savings among household sector is good as it leads development of economy.

It results to increase in investment rate quantum. Money market and capital market
development depends upon investment and savings. The present study was conducted
to know about the savings, Investment patterns, factors influencing investment, risk,
and satisfaction on returns of the college teachers. It is very important to know about
the savings and investment of college teachers in self-financing colleges as they have
less income when compared to regular college teachers.

1.4 SCOPE OF THE STUDY

The study was limited only to teachers among the three self-financing colleges
of Changanacherry municipality.

1.5 OBJECTIVES OF THE STUDY:

1. To evaluate the saving habits and investment pattern of self-financing college

teachers at Changanacherry.

2. To analyze investment selection behaviour of college teachers at Changanacherry.

3. To study the challenges faced by salaried college teachers in making investment.

4. To study how their income are utilized for the purpose of investment.

1.6 METHODOLOGY OF THE STUDY

1.6.1 Collection of data

The study was conducted among college teachers of arts and science self-
financing colleges in Changanasserry Municipality. Both primary data and secondary
data were used for the study.

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  Primary data
Primary data was collected using a Questionnaire which was prepared on
covering the objectives. The respondents were selected according to
convenience Sampling Method. The Questionnaire was distributed to selected
number of teachers from selected colleges.
 Secondary data
The secondary data were collected from internet and other published books,
articles, magazines, etc.
Sampling unit
The units selected for the study comprises of the teachers of S.B College
Changanasserry, Kristu Jyoti College of management studies Changanasserry, and
St.Joseph College of communication Changanasserry.
Sampling size
The sample size was restricted to 50 teachers from three main self-financing
colleges in Changanasserry municipality.

1.6.2 Analysis of data:

The data collected were analyzed using statistical techniques like percentages
and averages. Graphs and charts were used for data interpretation.

1.7 LIMITATIONS OF THE STUDY:

1. The study was based on samples selected. So, inherent limitations of sample study
may affect the quality of data.

2. Only 50 respondents were selected within the area of Changanassery. So the result
can’t be generalized.

3. Some of the respondents were reluctant to reveal some information based on the
study.

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1.8 PRESENTATION OF THE STUDY

CHAPTER 1- INTRODUCTION:

This chapter deals with the introduction of the study and explains the
significance, objectives, methodology, limitations of the study and literature review.

CHAPTER 2 – CONCEPTUAL FRAMEWORK ON SAVINGS AND

INVESTMENT: AN OVERVIEW

This chapter provides a detailed explanation of the term investment and its
history, continuing with its features, the main types of the investment, and its merits
and demerits.

CHAPTER 3 – INVESTMENT AND SAVING BEHAVIOUR IN INDIA WITH

SPECIAL REFERENCE TO KERALA

This chapter deals with the information regarding the investment pattern in our

country and with a special note about Kerala’s investment pattern.

CHAPTER 4 – DATA ANALYSIS AND INTERPRETATION

This chapter deals with the analysis and interpretation of the data collected
through the study. The analysis is prepared by keeping the main objectives in view.

CHAPTER 5 - FINDINGS, SUGGESTIONS AND CONCLUSION

This chapter provide findings, suggestions and conclusions which are made
based on analysis and interpretation of data.

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 CHAPTER II

CONCEPTUAL FRAMEWORK ON
SAVINGS AND INVESTMENT: AN
OVERVIEW

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INTRODUCTION

This chapter says about the meaning, definition, types and various
features of savings and investment. This chapter helps to know about the
importance and makes us understand about the savings and investment criteria.
Investment is what you can do with the savings you have created-if you are
looking to generate a return on your money that is greater than what is already
available to you through your savings instruments. Investment culture is a
prerequisite and financial planning is a challenge for most people in the country
when resources are limited and needs are endless. As with most challenges,
achieving financial security is very much a matter of understanding concepts,
organizing information and developing a workable process. Hence, financial
planning, investment and saving should be a series of steps that help us reach
our financial goals in future with ease.

2.1 DEFINITION OF SAVINGS

Savings is defined as the portion of disposable income not spend on

consumption of consumer goods but accumulated or invested directly in capital
equipment or in paying of home mortgage or indirectly through purchase of
securities.

2.1.1 SAVING, SAVING BEHAVIOR AND SAVINGS

A distinction should be made between saving, saving behaviour and

savings. Saving refers to the activity or process of saving. Saving behaviour is
synonymous to saving but puts an emphasis on the behavioural aspects. Savings
finally represents the outcome of saving activities and saving process. In
ordinary language saving behaviour means the behaviour of savings. Waste is
often seen as the alternative to saving; implying that refraining from some
consumption is always possible. The absence of savings can be caused by
poverty without any waste of money. Behaviour of saving has changed

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dramatically in the past few decades. It is a common phenomenon that people
will spend money. Therefore, saving money is not an easy task to deal with.
Saving is a part of spending. It is facts that, people are encouraged to save for
meeting contingencies in the future. There was a time in the fifties when prices
remained more or less constant. They did rise marginally, but the rise was too
small to have a significant impact on the cost of the daily living. As a result,
most people felt economically secure did not feel the necessity to take
investment seriously. In the sixties, this scenario underwent a drastic change.
Price began rising steadily and continuously and the value of the rupee dropped
sharply. The seventies and the early eighties saw a further acceleration in the
trends. Hard work and thrift is no longer enough to provide for the future. In
these stages, people understood the need for saving and investment.

It is a common phenomenon that limits his present want and invests a

portion of his energy and resources to make his future a safer one. The desire to
save is universal and all persons like to save something and invest it in some
investment alternatives. Traditionally, Indians are found to set apart a
significant portion of their earnings as reserve for future. The objective of saving
may be the financial security of his family, or to meet contingencies in the
future. In the process of planned development of a developing country like
India, savings have a crucial role, its importance being manifold. The economic
development of any country is generally measured in terms of national income,
as determined by savings and investment. In India, along with increase in
volume and rate of savings, the volume of spending has also increased
considerably. Sustaining a high rate of economic growth require a higher rate
of domestic savings. The saving rate in our country after achieving
independence shows an increasing trend.

In 1950-51, the gross domestic savings in India was only was Rs 9.75
crores. In India, the savings of the household sector constitutes a majority of the
total savings of the economy. Every household has some amount of savings
normally kept in the form of investment either in securities or otherwise and
which may be of long or short term in nature.

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2.1.2 SAVING: APSYCHOLOGICALPOINTOF VIEW

From a psychological point of view, saving can be considered as the

result of a deliberate decision making process and to save as the act of regularly
putting away some resources for a goal i.e. a pension fund, to buy something,
to give a present. In economics, saving has been the object of intense theoretical
and empirical consideration. While a sensible one, highlights the growing gap
between theory and policy prescription in this domain. If households are acting
in accordance with the life-cycle theory of saving then under saving is
impossible.

Many observers have come to the conclusion that the low saving rate
represents an important problem on two fronts: macroeconomists worry that the
low saving rate will produce too little investment and micro economists worry
that individuals, particularly the baby boomers, are not putting enough away to
finance a satisfactory lifestyle in retirement. These are serious concerns.
However, the frustration comes from the realization that, even if there was an
agreement that the saving rate needs to go up, economic theory offers little help
in constructing a solution. In the standard life-cycle frame work the only policy
variable is the after tax rate of return to saving. In psychology it has been treated
from a variety of points of view. Since the early studies have focused on the
influence of personality traits, such as the ability to delay gratification, self-
control, aversion to risk, locus of control, time-preference and others have
analysed the effect of socio-economic variables(age, education, income),habits
and attitudes showing that the decision to save, although influenced by
economic factors involves complex psychological and socio-psychological
processes. Life cycle models of saving fail to describe actual household saving
in three important ways. The failure of the theory is good news because by
incorporating some basic psychology, we can enrich the theory and generate
specific policy recommendations.

Figuring out how much to save and the best dynamic path for achieving
any given goal are difficult problems even for economists. It is the rare person
indeed who could literally solve the implicit problem posed by the theory.

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 Furthermore, given that most people only save for retirement once, the
opportunities for learning by doing are minimal. The only plausible ways in
which people might approximate an optimal saving plan is either by learning
from others or by using good rules of thumb. While this possibility cannot be
ruled out on priority grounds, numerous studies have investigated whether
households save enough to accommodate their retirement needs. A recent study
concludes that the baby boom generation is saving only a third of the amount
necessary to maintain their consumption in retirement.

2.1.3 IMPORTANCE OF SAVING MONEY

We all know this only too well, we live in a very materialistic world,
where we are constantly advertised to buy the new I pad, get a new car, buy this
new and advanced washing machine. Not only do those pressures exist, there is
also the peer pressure of “keeping up with the Jones”, many of us don’t want to
feel left out-that our friends have material goods, we should too. So it is not
surprising that it has more of a spending, consumer mindset as does much of the
countries in world and this is often seen as “living the good life”.

Following are some of the features of saving money:

 IMPROVED QUALITY OF LIFE

Saving money not only helps you to improve your life, get ahead by
investing add security to potential troubles you face. It also helps the overall
Australian economy. If we are all overloaded with the debt the economy can
became very unstable - just look at America. Saving money may require a bit
of short term pain for long term gain, but it’s worth it you can be assured that
as time goes by your financial situation improves on a compounding basis. You
can start saving money with automatically transferring the smallest of amounts
into a high interest online savings account. You will hardly miss the money and
can gradually increase the amount overtime. Reward yourself by saving.

 SAVE FOR EMERGENCY NEEDS

It is important to have an emergency fund set aside to cover unexpected

expenses. This could cover an unexpected car repair, your emergency

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 appendectomy or sudden job loss. Ideally your emergency fund should be about
three to six months of your expenses.

 SAVE FOR RETIREMENT LIFE

Another important reason to save money is your retirement. The sooner
you start saving for retirement, the less you will have to save in future. You can
put your money to work for you. As you continue to contribute overtime you
will be earning more interest on the money you have, then you put in each
month. You should at least a contributing up to your employer’s match and
eventually you will want to contribute ten to fifteen per cent of your gross
income.
 SAVE FOR A DOWN PAYMENT FOR A HOUSE

Your negotiating power goes a lot farther when you have significant
down payment towards your home. You will receive better interest rates, and
be able to afford a bigger home. You can determine how much you save towards
this each month depending on your circumstances.

 SAVE FOR VACATIONS AND OTHER LUXURY ITEMS

You can save your money for foreign trips. Additionally you can be
saving for fun large ticket items such as a play station or a new boat. Your
negotiating power is stronger if you have cash in hand on bigger purchases. .

 SAVE FOR SINKING FUNDS

A sinking fund is money you set aside for future repairs or

improvements on your car, home or other possessions. The planning can help
you to stop dipping into your emergency fund every time you need to fix your
car.

 EDUCATION
Each year more return to school to earn their doctorate degrees. You
can also consider saving for your child’s education when the time comes. Each
year more people return to school to earn their masters or doctorate degrees.

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2.2 MEANING OF INVESTMENT

2.2.1 ‘INVESTMENT’

An investment is an asset or item that is purchased with the hope that it will
generate income or will 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 will be sold at a higher price for a profit.
Investing is the act of committing money or capital to an endeavor (a business, project,
real estate, etc.) with the expectation of obtaining an additional income or profit.

2.2.2 INVESTOR

An investor is any person who commits capital with the expectation of financial
returns. Investors utilize investments in order to grow their money and/or provide an
income during retirement, such as with an annuity. A wide variety of investment
vehicles exist including (but not limited to) stocks, bonds, commodities, mutual funds,
exchange-traded funds (ETFs), options, futures, foreign exchange, gold, silver,
retirement plans and real estate. Investors typically perform technical and/or
fundamental analysis to determine favorable investment opportunities, and generally
prefer to minimize risk while maximizing returns.

2.2.3 HISTORY OF INVESTMENT

The Code of Hammurabi (around 1700 BC) provided a legal framework for
investment, establishing a means for the pledge of collateral by codifying debtor and
creditor rights in regard to pledged land. Punishments for breaking financial obligations
were not as severe as those for crimes involving injury or death. In the early 1900s
purchasers of stocks, bonds, and other securities were described in media, academia
and commerce as speculators. By the 1950’s the term investment had come to denote
the more conservative end of the securities spectrum, while speculation was applied by
financial brokers and their advertising agencies to higher risk securities much in vogue
at that time. Since the last half of the 20th century, the terms speculation and speculator
have specifically referred to higher risk ventures than investment and investors.

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2.2.4 TYPES OF INVESTORS

 Only Savers:
Majority investors are from this category. They are happy with what
they are getting but generally thrilled, all the same.
 Regular Investors :
This is a rare breed. They have a long term view over equity. They will
never discuss small market events. They are also a bit mechanical in investing.
They invest when they have a surplus and withdraw when in need. They are
convincing over the fact that equity will beat all other investments in long run.
 Window shopper :
They will be the first to read or get information over an investment but
they will never participate in markets. They will constantly float opinions and
talk about personal finance but will not dare to risk own money. He is the non-
playing captain who will never dare to sweat himself but would be the first one
to talk about strategies.
 Seasonal Traders :
These are experienced people but who have earned nothing from
investments. These are generally close to employees of trading house or
investing professionals. They live in a fantasy that all the “first news” comes to
them. They show they are waiting for the right opportunity to make a killing in
the markets. They are irregular investors and have high volume of trade.
 Scapegoats:

He is basically a friend of financial product seller. Agents’ complete

majority of their targets form these investors. He takes advices from all. He is
busy in earning money and managing daily chores thinking he would be rich
sometime. Brokers enjoy their money.

2.2.5 TYPES OF INVESTMENT

 Precious Metals
Precious metals refer to the classification of metals that are considered
to be rare and/or have a high economic value. The higher relative values of these
metals are driven by various factors including their rarity, uses in industrial

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 processes and as investment vehicles. The most popular precious metals with
investors are gold, platinum and silver
 Diamonds
Diamonds are an extremely hard gemstone used mainly for jewellery,
tools and as an investment in precious stones. Many wealthy individuals
consider diamonds a good investment because they are able to buy high-priced
stones with relatively low transactions costs and its value grows, as with
antiques or art.
 Art and Antiques
Both art and antiques are great investments for people who have money
they want to put aside for long term. These assets are however, very illiquid.
The basic advantage is that the investor can sell it at any price.
 Real Estate
Real estate investing involves the purchase, ownership, management,
rental and/or sale of real estate for profit. The important attraction of real estate
is that it acts a practical hedge against inflation.
 Bonds
When you purchase a bond, you are lending out your money to a
company or government entity. They pay you interest on your money and
eventually pay you back the amount you lent out and it is more risky but
provides a better return on interest rate.
 Insurance
It is a contract between an individual and the company whereby agrees
to pay a certain sum of money on the death of the insured or on the expiry of
the period whichever is earlier. It acts as a good investment alternative.
 Post Office Savings
Like the commercial banks, post office also offers different kinds of
savings or investment schemes to the investors to invest for future benefit.
 Debenture
A debenture is a document which either acknowledges or creates a debt.
Basically, there are two types of debentures; convertible and non-convertible
debentures. Convertible debentures carry an option for conversion into equity

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 shares after a specified period. It is a good investment in case one refers fixed
and regular income, along with certain degree of capital appreciation.
 Chit Funds
Chit funds can be chosen as an investment option depending upon your
need and financial situation. But before investing in chit fund, make sure that
you are choosing a good company run by credible promoters. The state
governments and the ministry of corporate affairs publish a list of registered chit
fund companies.
 Stocks
This is ownership interests in part of a company. When you buy stock
in Google or Starbucks, you are becoming part owner of the business. This
allows you to potentially receive profits that the company allocates to its
owners.
 Mutual Funds
They are pooled collection of stocks and bonds that are overseen by a
professional manager. Mutual funds often usually focus on a specific type of
investment such as small companies in lieu of cash. These would have high and
low risks.
 Provident Fund
This is one of the safest long term investment options. This is mainly for
retirement purpose. It is created by an amount deducted from the employees
every month at a certain rate and the employer makes his own contribution to
this fund. It provides benefits of safety, income, collateral value and tax benefits
to the investors. It is classified into four, statutory provident fund, recognized
provident fund, public provident fund and unrecognized provident fund.

2.2.6 FEATURES OF INVESTMENT

In choosing specific investments, investors will need definite ideas

regarding features which their portfolios should possess. These features should
be consistent with the investors’ general objectives and, in addition, should
afford them all the incidental conveniences and advantages which are possible

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 under the circumstances. The investors, generally, form their investment
policies on the basis of following features:

 Safety
The safety of investment is identified with the certainty of return of
capital without loss of money or time. Safety is another feature that an investor
desires from investments. Every investor expects to get back the initial capital
on maturity without loss and without delay. Investment safety is gauged
through the reputation established by the borrower of funds. A highly reputed
and successful corporate entity assures the investors of their initial capital. For
example, investment is considered safe when it is made in securities issued by
the government of a developed nation.
 Liquidity
A liquid investment is that which can be converted into cash
immediately at full market value in any quantity whatsoever. Every investor
must ensure a minimum liquidity in his investments. To ensure liquidity, the
investor should keep a part of his total investments in the form of readily
saleable securities. Investments like real estate, insurance policy, pension
fund, fixed time securities etc. cannot ensure immediate liquidity. Such
investment should be added in the portfolio only after ensuring minimum
liquidity
 Regularity and Stability of Income
Regularity of income at a stable and consistent rate is essential in any
investment programme. However, the stability of income is not consistent
with the other investment principles. Monetary stability limits the scope for
capital growth and diversification.
 Stability of Purchasing Power
Investors should balance their investment programs to fight against any
purchasing power instability. Any rational investor knows that money is
losing its value by the extent of the rise in prices. If money lent cannot earn
as much as rise in prices or inflation, the real rate of return is negative.
 Capital Appreciation
Capital appreciation has become a very important principle in the
present day’s volatile markets. The ideal growth stock is the right issue in the

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 right industry bought at the right time. The investors should try and forecast
which securities will appreciate in future. It is an exceedingly difficult job and
should be done thoughtfully in as scientific manner and not in the way of
speculation or gambling.
 Tax Benefits
Every investor must plan his investment program keeping in mind his
tax status. Investors should be concerned about the returns on the investments
as well as the burden of taxes upon such returns. Real returns are returns after
taxes. Tax burden on some investments are more whereas some investments
are tax free. The investors should plan their investments in such a way that the
tax liability is minimum.
 Concealability
Sometimes, the investor has to invest in securities which can be
concealed and leave no record of income received from them.
Concealability is required to be safe from social disorders, government
confiscation or unacceptable levels of taxations. Gems, precious stones etc,
have been used for this purpose since ages because they combine high value
with small bulk and are readily transferable. Concealability when done to
avoid confiscation or taxation is not legal but it is still resorted to buy majority
of investors.

2.2.7 IMPORTANCE OF INVESTMENT

 High Tax Rates

Most of the people are reluctant to pay high amount as tax from their
earnings. They are always seeking for measures to reduce the tax liability. Tax
incentive investment schemes help the people in bringing down the tax liability.
They make use of the provisions in the Income Tax Act such as deductions,
exemptions and rebates in order to reduce the tax liability.
 Inflation
Every developing economy is phased with the problem of rising prices
and inflationary trends. Investment in growth stocks and in gold gives a good

[21]
 cover against inflation. The increased tendency of people to hedge against
inflation assumes greater significance to investment.
 Availability of various investment alternatives
Increased number of investment avenues offered to general public
attracts them to make investment according to their own needs. Earlier there
was only one avenue i.e.; bank deposits. But now the scene is different, there
are a large number of alternatives available to the public.
 Planning for Retirement Life
Another point which gives significance to investment decision is
planning for retirement life. Most of the people plan for life after retirement, so
they earmark a portion of their current year earnings as savings. Men and
women will be responsible for planning their own investments during their
working life so that after retirement they are able to have a stable income.
 Interest Rates
The level of interest rates is another aspect which is necessary for a
sound investment plan. Interest rates vary between one investment and another.
These may vary between risky and safe investments; they may also differ due
to different benefit schemes offered investments.

[22]
 CHAPTER III

INVESTMENT AND SAVING BEHAVIOUR

IN INDIA WITH SPECIAL REFERENCE TO

KERALA

[23]
INTRODUCTION

The developing countries like India face the enormous task of finding sufficient
capital in their development efforts. Most of these countries find it difficult to get out
of the vicious circle of poverty of low income, low saving, low investment, low
employment etc. With high capital output ratio, India needs very high rates of saving
and investments to make a leap forward in her efforts of attaining high levels of growth.
Since the beginning of planning, the emphasis was on saving and capital formation as
the primary instruments of economic growth and increase in national income. In order
to have production as per target, capital foundation was considered the crucial
determinant and capital formation had to be supported by appropriate volume of saving.
Growth will set in motion a self-reinforcing process by which investment is encouraged,
investment enhances growth and increased income raises saving. As Rao (1980) has
rightly pointed out, "increase in saving, use of increased saving for increased capital
formation, use of increased capital formation for increased saving for a further increase
in capital formation constituted the strategy behind economic growth. This process of
increased capital formation leading to increased saving and increased saving leading to
increased capital formation will continue till saving, capital formation and income reach
desired levels after which saving and capital formation gets stabilized and there would
be a steady and self-sustaining increase in national income.

3.1 INVESTMENT AND SAVING BEHAVIOUR IN INDIA

3.1.1 GROWTH RATE - THE INDIAN EXPERIENCE

In the years since independence India has achieved considerable progress in

terms of real GDP growth, real volume of saving and real investment. However, as was
pointed out by Ray and Boss (1997), the growth trajectory of the Indian economy is
often conceived in terms of transitional dynamics from one crisis to another. Starting
from the average low growth rate called "the Hindu growth rate" termed by Raj Krishna
(1983), and passing through the unsustainable high growth path of the eighties, India
has reached the high growth trajectory after major policy reforms in the nineties with

[24]
occasional crisis years in between. During this process of growth, the Indian economy
has undergone gradual structural transformation, the pace of the transformation being
rapid in the last decade. For the analysis of the growth trends, the time period
classification resorted to is the five-year plan periods, the interim periods being treated
separately.

3.1.2 TRENDS IN DOMESTIC SAVING AND INVESTMENT

Almost from the inception of economic planning, the prevailing low level of
saving and investment was assessed by the planners and then targeted to achieve a self-
reliant and self-sustaining economic growth by achieving a sharp increase in the saving
2nd investment rates

3.1.3 SECTORAL COMPOSITION OF GROSS DOMESTIC

PRODUCT (GDP)

Every economy shows some kind of structural transformation in the

development process. Kuznets (1955) explains this in terms of migration of labour from
agriculture to industry. In the Indian development experience, the share of agriculture
in the GDP has declined whereas the shares of industry and services have increased.

3.1.4 SECTORAL COMPOSITION OF SAVING

For a better understanding of the domestic saving picture, a disaggregated

analysis of saving, breaking it into the household sector, private corporate sector and
public sector is needed.

3.1.5 TRENDS IN CAPITAL FORMATION

Capital formation in the country represents a major production potential and is

a major determinant of economic growth. The assets in which the fixed capital is
formed, its distribution into different production sectors like the public sector, private
corporate sector, and households sector, the gestation periods involved, the degree of
utilization of capital and the efficiency of utilization are all factors that influence the
impact of capital formation on the generation of income.

[25]
3.1.6 HOUSEHOLD SECTOR

It is the capital formation in the household sector, which has led to a respectable
figure for capital formation in the country. From 55 per cent of the total capital
formation during the first plan, its share decreased during the next two plan periods to
touch 31.42 per cent during the third plan. During the next three periods, this sector
contributed the lion's share in the total capital formation in the economy. However, with
increase in financial saving of the household sector, physical capital formation by this
sector has come down tremendously. According to Raj committee report (1982) the
increase in household capital formation in the late sixties and seventies has been due to
the substantial growth of the incorporated enterprises outside the farm sector and the
larger quantities of machinery and equipment. In the asset wise classification, the share
of the sector in construction has been very high throughout this period which includes
residential construction also. The share of this sector in machinery and equipment has
been constant at around 40 percent till the fifth plan, which came down to reach 22.96
percent in the eighth plan. The household sector showed negative inventories till the
annual plans, which increased to touch 69.94 per cent of the total inventories in the
eighth plan.

3.1.7 SHARE OF PHYSICAL ASSETS IN HOUSEHOLD SAVING

The share of physical assets in household saving has declined from 87.19
percent in 1950-51 to 39.81 per cent at the end of the eighth plan. However, this fall in
physical saving has not been a smooth one. The quantum jumps and subsequent decline
in physical assets formation was responsible for a similar behaviour in total household
saving, whereas household saving in financial assets show a steady upward trend. The
upward trend in the ratio of household saving in financial assets was considered by
Rakshit (1982) and Shetty and Menon (1980) and found that the household financial
saving were exaggerated due to certain extraneous developments such as the bunching
of financial asset growth due to procurement and foreign inward remittances. Thus,
household saving have been and continue to be of critical importance to physical asset
formation in the economy. Not only they undertake almost half the aggregate physical
investment, but, by transferring saving they make possible greater investment in the
public and private corporate sectors.

[26]
3.1.8 PRIVATE CORPORATE SECTOR SAVING

The importance of corporate sector saving and public sector saving in the growth
performance of economies has been highlighted with reference to East Asian economies
by Woo (1991) and Akyuz and Gore (1994).

3.2 INVESTMENT AND SAVING BEHAVIOUR IN INDIA

WITHSPECIAL REFERENCE TO KERALA

The availability of time series information on different states in India is doubtful

and even if they are available their comparison are not very meaningful because of the
differences in geographical size, population, and infrastructure and so on. Considering
these difficulties, interstate analysis is not attempted. A study of the determinants of
saving behavior of Kerala households requires an analysis of the growth of income,
saving and capital formation in the state. Though data on state domestic product is
published by the State Planning Board, normally official agencies do not compile data
on saving and capital formation in the state. Hence a systematic analysis of the saving
and capital formation in the state and in the different sectors of the state is beyond the
scope of this study.

3.2.1 SAVING AND CAPITAL FORMATION IN THE STATE

Due to lack of reliable data on saving mobilized in the state and on capital
formation, an analysis of these two variables is beset with problems. One of the
important forms of financial saving is the deposit mobilized by the commercial banks,
co-operative banks and regional rural banks. Rs.3433.79 crores was mobilized by the
banking sector in Kerala in 1986 which works out to 54.34 per cent of the state domestic
product. 24.58 per cent of this is in the form of NRE deposits. Total deposits increased
to Rs.6620.08 crores in 1990- 91, that is, 54.89 per cent. In 1994-95, the deposits
mobilized by the banking sector show a further increase to Rs.17457.91 crores and
further to Rs.3 153 1.84 crores in 1999, which comes to Rs.55710.29 crores in 2001.

[27]
3.2.2 KERALITES’ INVESTMENT PREFERENCE

A study by the new Indian express reveals that Malayalees invest 79per cent in
real estate and 13per cent invest in gold. Despite the bullish stock and the mega returns
from stocks, Malayalees seem to have an aversion for such risky investment options.
As per RBI findings, stocks and other financial investments contribute a mere 2.8
percent.

The investment in retirement fund is even smaller. As for allocation of debt

across product types, Malayalees depend on gold to avail themselves of loans. The RBI
said gold loans constituted 17.2per cent of Keralites, followed by unsecured debt (31.6
per cent) and non-constitutional debt (20per cent).

For non-life insurance (agricultural, medical and accident), Oddissa, Tamil

Nadu and Kerala have the highest participation rates (22.17per cent, 15.28per cent,
14.90per cent, respectively), while in Jharkhand, Bihar, Himanchal Pradesh and Uttar
Pradesh the participation are less than 1per cent, the RBI report said.

3.2.3 SAVINGS AND INVESTMENT BEHAVIOUR OF COLLEGE

TEACHERS

In India the major part of fund is from house hold sector .Indian households
undertake savings in form of both financial and non-financial form. House hold sector
savings is linked with growth. The saved money should invest in proper investment
avenues. The country’s savings and investment has to increase in positive way for
development. The Indian house hold sector is divided into many class people. Salaried
class people play an important role. People from salaried segments had fixed source of
income. Salaried class people will have the mentality of savings for future emergencies
with minimum risk people tend to invest the money in proper investment avenues to
maximize the return. From the various classes of salaried class people, college teachers
are subset of household segment. Teachers build valuable pillars to society. They serve
as potential guide for youngsters of today and investors of future. A teacher serves as
maker of mankind and builds future architect of society. College teachers are one of
elite income group segment in society. Importance is given to resource mobilization
keeping in mind for future requirements. Their aim is to save money after spending
their income. College teachers know trick of maximizing their savings. They end to

[28]
invest saved money in proper investment avenues after making deep analysis about
investment avenues in which they are interested to invest the money. Analysis is made
to avoid risk, maximize its return and capital appreciation. Investors are sensitive about
their safety of their investments made. They need safety and reliability for their
investments. College teachers invest their money in safer environment, need regular
income from their investment made with lower risk. Most of the teachers are considered
safety for selecting the mode of saving and Bank deposits was considered as the main
option of the investment followed by Insurance. Today the teaching community has
started realizing the importance of money and money’s worth. They are initiated to
prepare a budget for the proposed expenses and compare it with the actual expenses
met by them, so that they are not influenced by other tempting and fashionable
expenses.

[29]
 CHAPTER IV

DATA ANALYSIS AND

INTERPRETATION

[30]
INTRODUCTION

Data analysis is an application of reasoning to understand, clear and interpret

the data or information that have been collected through questionnaires. The study is
conducted among college teachers of self-financing colleges in Changanasserry
Municipality. Both primary and secondary data were used for the study.

The units selected for the study comprises of the teachers of KRISTU JYOTI
COLLEGE CHETHIPUZHA, ST.BERCHMANS COLLEGE CHANGANASSERRY,
and ST.JOSEPH COLLEGE OF COMMUNICATION CHANGANASSERRY.

The collected data analyzed by using simple mathematical tools. Charts and
graphs are used for getting clear inference.

Microsoft office is mainly used for entering and analyzing the data. Microsoft
Word 2007 is used for preparing the project and Microsoft Excel is used for analyzing
data and preparing charts and graphs.

The data were analyzed on the basis of the following objectives:

1. To evaluate the saving habits and investment pattern of self-financing college

teachers at Changanacherry.

2. To analyze investment selection behaviour of college teachers at Changanacherry.

3. To study the challenges faced by salaried college teachers in making investment.

4. To study how their income are utilized for the purpose of investment.

[31]
 Table: 4.1
Age of the respondents

Age classification No. of respondents Percentage

20-30 27 54

30-40 14 28

40-50 4 8

Above 50 5 10

Total 50 100

Source: Primary Data

Figure: 4.1

Age of the Respondents of the study

Above 50, 5

40-50, 4

20-30, 27

30-40, 14

20-30 30-40 40-50 Above 50

INTERPRETATION

Biggest categories in this study were represented by the age of 20-30 and 30-40
years of age group were 54 per cent and 28 per cent respectively. Also 8 per cent and
10 per cent represented the age group 40-50 and above50 respectively. It shows that
young teachers were working more in these self-financing colleges.

[32]
 Table 4.2

Gender of the Respondents

Gender No. of respondents Percentage

Male 19 38

Female 31 62

Total 50 100
Source: Primary Data

Figure: 4.2

Gender of the Respondents

Female
62%
Male
38%

INTERPRETATION

Table shows the gender classification of the respondents. 62 per cent of the
respondents were females and 38 per cent were male.

[33]
 Table: 4.3

Marital Status of the respondents

No: of persons Percentage
Marital Status
25 50
Married
25 50
Unmarried
50 100
Total
Source: Primary Data

Figure: 4.3

Marital status of the respondents

Married Unmarried

50%
50%

INTERPRETATION

The study were conducted in three different colleges, out of the 50

respondents.50 per cent of the teachers were married and 50 per cent are not.

[34]
 Table: 4.4

Educational Qualification

Educational Qualification No: of persons Percentage

P.G 46 92

PhD 2 4

M.Phil 2 4

Total 50 100
Source: Primary Data

Figure: 4.4

Educational qualification of the respondents

4 4

92
P.G Ph.d M.Phil

INTERPRETATION

As the table and graph shows a very large group of teachers that is 92 per cent
of them is only having a P.G. While only 4 per cent have PhD and rest 4 per cent have
M.Phil.

[35]
 Table: 4.5
Employment status of the respondents

Employment status No: of persons Percentage

38 76
Assistant professor
5 10
Associate professor
6 12
Professor
1 2
Guest Lecturer
50 100
Total

Source: Primary Data

Figure: 4.5

Employment status of the respondents

6 1

38

ASSISTANT PROF. ASSOSSICATE PROF. PROFESSOR GUEST LECTURER

INTERPRETATION

Table 4.5 discloses the employment status of the respondents. Out of the 50
respondents 76 per cent were assistant professors. Only 10 per cent of them were
associate professors, and 12 per cent are professors. The number of guest lecturers was
very low they were only of 2 per cent.

[36]
 Table: 4.6

Annual Income of the Respondents

Annual Income No: of Persons Percentage

Below 200000 20 40

200000-400000 23 46

400000-600000 5 10

Above 600000 2 4

Total 50 100

Source: Primary Data

Figure: 4.6

Annual Income of the Respondents

25

20

15

10

0
Below 200000 200000-400000 400000-600000 Above 600000

Annual Income

INTERPRETATION

The table shows the Annual income of the respondents 46 per cent have annual
income between 200000 and 400000. 40 per cent of the respondents have their annual
income below 200000.And 10 per cent of the respondents have their annual income
between 400000 and 600000 only 4 per cent of the respondents have their annual
income more than 600000.

[37]
 Table: 4.7

Any Investments or savings

Any Investments No: of persons Percentage

50 100
Yes
0 0
No
50 100
Total

Source: Primary Data

Figure: 4.7

Any kind of Investment or savings

100%

Yes No

INTERPRETATION

The table and graph shows that cent percent of the respondents have
investments. It shows the importance of investment and savings

[38]
 Table: 4.8

Saving and Investment Sector

Particulars Rank R2 R3 R4 R5 R6 R7 R8 R9 R 10 R 11 Total

1

Shares 33 30 0 24 28 24 25 24 45 6 4 243

Debentures 0 20 36 8 21 18 60 36 21 18 0 238

Mutual 0 10 72 40 56 54 25 28 3 8 2 298
funds

Bank 242 90 36 64 14 18 0 1 0 2 0 467

deposit

insurance 132 120 81 32 35 6 10 12 0 2 1 431

Gold 22 80 27 64 35 60 10 12 9 4 4 327

Real estate 11 10 18 40 35 35 50 24 24 4 3 254

Chit funds 66 20 63 40 49 30 40 32 3 2 0 345

Antiques 11 20 18 32 28 24 20 16 30 18 6 223

Post office 11 100 90 16 42 18 0 12 12 14 4 319

Others 22 0 18 32 7 18 10 0 0 20 26 153

Source: Primary Data

(Note: The total score is taken by giving weights as 11, 10, 9, 8, 7, 6, 5, 4, 3, 2, 1 for
rank 1, rank 2, rank 3, rank 4, rank 5, rank 6, rank 7, rank 8, rank 9, rank 10, rank 11
respectively.)

[39]
 Figure: 4.8

Saving and Investment Sector

500

450 467
431
400

350
345
300 327 319
298
250
254
243 238
200 223

150
153
100

50

INTERPRETATION

As the table and graph shows majority of the respondents invest their savings in
banks and in insurance while a good amount of people also invests in chit funds, gold,
post office, mutual funds and others which includes shares, debentures, real estate,
antiques, etc…

[40]
 Table: 4.9(a)

a. Objective of Saving and Investment

Particulars Rank Rank Rank Rank Rank Rank Rank total

1 2 3 4 5 6 7

Children’s 11 8 6 11 5 8 1 50
education

Better living 14 13 10 6 5 2 0 50

Health 6 10 19 7 7 1 0 50

Retirement life 4 3 4 9 4 15 11 50

Children’s 2 5 5 6 18 11 3 50
marriage

Unexpected 13 11 10 9 4 2 1 50
needs

Tax reduction 2 6 4 6 3 3 26 50

Source: Primary Data

[41]
 Table: 4.9 (b)

b. Weighted Score with rank

Particulars Rank1 Rank2 Rank3 Rank4 Rank5 Rank6 Rank7 total

Children’s 77 48 30 44 15 16 1 231
education

Better living 98 78 50 24 15 4 0 269

Health 42 60 95 28 21 2 0 248

Retirement 28 18 20 36 12 30 11 155
life

Children’s 14 30 25 24 54 22 3 172
marriage

Unexpected 91 66 50 36 12 4 1 260
needs

Tax 14 36 20 24 9 6 26 135
reduction

(Note: The total score is taken by giving weights as 7, 6, 5, 4, 3, 2, 1 for rank 1, rank
2, rank 3, rank 4, rank 5, rank 6, and rank 7 respectively.)

[42]
 Figure: 4.9

Objective of Saving and Investment

300
269
260
248
250 231

200
172
155
150 135

100

50

0
Children’s Better living Health Retirement life Children’s Unexpected Tax reduction
education marriage needs

INTERPRETATION

Out of 50 respondents majority of them saves and invests for a better living and
to meet the unexpected needs. A good amount of the income is also saved by the
respondents for health, children’s education. They also save money for meeting
children’s marriage expenses and for living a better retirement life and also for the
purpose of tax reduction.

[43]
 Table 4.10

Factors influencing Investment decision

Particulars Strongly Agree Disagree Strongly

Agree Disagree

Risk 19 (38) 24 (48) 5 (10) 2 (4)

Return 25 (50) 21 (42) 3 (6) 1 (2)

Quality of 15 (30) 25 (50) 6 (12) 4 (8)

instruments

Influence of family 13 (26) 23 (46) 10 (20) 4 (8)

Security 19 (38) 20 (40) 7 (14) 4 (8)

Rate of interest 13 (26) 25 (50) 12 (24) 0 (0)

Investing areas 11 (22) 25 (50) 13 (26) 1 (2)

Source: Primary data

(Note: Figures shown in the brackets indicates the percentages.)

[44]
 Figure: 4.10

Factors influencing Investment decision

Strongly Agree Agree Disagree Strongly disagree

60

50 50 50 50
50 48
46
42
40
40 38 38

30
30
26 26 26
24
22
20
20
14
12
10
10 8 8 8
6
4
2 2
0
0
Risk Return Quality of Influence of Security Rate of interest Investing Areas
Instruments family

INTERPRETATION

Table 4.10 represents the various factors that influence the investment decisions
of a person. A large number of respondents strongly agrees that return, risk and security
are the main factors that influences their investment decision. A good number of
respondents also agrees that rate of interest, investing areas and quality of instruments
also affect their investing decisions. 26 per cent, 24 per cent and 20 per cent of the
respondents disagrees that investing areas, rate of interest and influence of family
influence them respectively. Only a very few respondents strongly disagree that the rate
of interest, investing areas and return influence their investing decision.

[45]
 Table 4.11
Frequency of Investment

Period Of Investment No: of persons Percentage

4 8
Often
29 58
Monthly
14 28
Yearly
3 6
Rarely
50 100
Total

Source: Primary Data

Figure: 4.11

Frequency of Investment

3 4

14

29

Often Monthly Yearly Rarely

INTERPRETATION

The table shows that 58 per cent of the total respondents have monthly
investments and 28 per cent have yearly investments. And also 8 per cent of the
respondents invest often and 6 per cent of the respondents invest rarely.

[46]
 Table 4.12

Investment Percentage

Investment Percentage No: of persons Percentage

16 32
Upto 10
13 26
10-15
9 18
15-20
12 24
More than 20
50 100
Total

Source: Primary Data

Figure: 4.12

Investment Percentage

35 32

30 26

25
18
20

15

10
4.5
5

0
upto 10% 10%-15% 15%-20% More than20%

INTERPRETATION

The table shows that 32 per cent of the respondents invest only up to 10 per cent of
their income. And 26 per cent, 18 per cent and 24 per cent of the respondents invests
10-15 per cent, 15-20 per cent and more than 20 per cent of their income respectively.

[47]
 Table: 4.13

Self-Rating of the respondents

No: of Persons Percentage

Self-Rating
26 52
Beginner
20 40
Moderator
13 26
Somewhat Expert
1 2
Expert
50 100
Total

Source: Primary Data

Figure: 4.13

Self-Rating of the respondents

60

50

40

30

20

10

0
Beginner Moderator Somewhat Expert Expert

INTERPRETATION

The table shows that 52 per cent and 40 per cent of the respondents rates
themselves as a Beginner and moderator respectively. 26 per cent of the investors
believe that they are somewhat expert whereas only 2 per cent of the respondents think
that they are expert in investment decisions.

[48]
 Table: 4.14

Source of Investment decision

Particulars No: of persons Percentage

Self 14 28

Co-workers 1 2

Friends 6 12

Internet 3 6

Family 24 48

Others 2 4

Total 50 100

Source: Primary Data

Figure: 4.14

Source of Investment decision

60
Family, 48
50

40
Self, 28
30

20
Friends, 12
10 Internet, 6 Others, 4
Co-workers, 2
0
Self Co-workers Friends Internet Family Others

INTERPRETATION

As the graph shows a large group of the respondents that is, 48 per cent of them
take the investment decisions from their families and 28 per cent takes the decision
themselves. Whereas only 12 per cent, 6 per cent, and 2 per cent makes their investment
decisions from friends, internet and co-workers respectively, and 4 per cent of the
respondents get the information from other sources.

[49]
 Table: 4.15

Level of Expectation

Particulars Respondents Percentage

Satisfied 43 86

Highly Satisfied 3 6

Dissatisfied 4 8

Total 50 100

Source: Primary Data

Figure: 4.15

Level of Expectation

100

90 86

80

70

60

50

40

30

20
6 8
10

0
Satisfied Highly Satisfied Dissatisfied

INTERPRETATION

From the graph it is understood that 86 per cent were just satisfied with the level
of expectation, only 6 per cent of the respondents were highly satisfied with the idea of
savings and investment while and the remaining 8 per cent were dissatisfied with this
idea.

[50]
 Table: 4.16

Level of Satisfaction

Particulars Satisfied Per cent Dissatisfied Percentage

Income from 39 78 11 22
Investment

Availability of 33 66 17 34
Alternatives

Support from 15 30 35 70
Government

Source: Primary Data

Figure: 4.16

Level of Satisfaction

Satisfied Dissatisfied

78
80
70
70 66

60

50

40 34
30

30 22

20

10

0
INCOME FROM INVESTMENT AVAILABILITY OF SUPPORT FROM
ALTERNATIVES GOVERNMENT

INTERPRETATION

Table 4.1656 shows the level of satisfaction among the respondents. 78 per cent
of the respondents are satisfied with their income from investments while 22 per cent
were not satisfied. Out of 50 respondents 66 per cent were satisfied with the availability
of alternatives and 34 per cent were dissatisfied. In case of Govt. support only 30 per
cent were satisfied while 70 per cent were dissatisfied.

[51]
 CHAPTER-V

FINDINGS, SUGGESTIONS AND

CONCLUSION

[52]
INTRODUCTION

This chapter had made an understanding on the variables that affect the
teachers’ savings and investment. In this chapter, it includes summary of statistical
analysis. A managerial implication is provided to increase the savings and investment
of teachers. The limitations and recommendations were stated to support future
researchers. It is important to conduct future research with in-depth knowledge on this
topic because savings and investment has a very important role in the development of
an economy.

5.1 FINDINGS

1. Biggest categories in this study were represented by the age of 20-30 and 30-
40 years of age group were 54 per cent and 28 per cent respectively. Also 8
per cent and 10 per cent represented the age group 40-50 and above50
respectively. It shows that young teachers were working more in these self-
financing colleges.
2. The study states that 62 per cent of the respondents were female, while
remaining 38 per cent were male.
3. The study reveals that 50 per cent of the respondents were married, while the
rest are unmarried.
4. Out of the 50 samples, 92 per cent of the respondents have PG qualification,
4 per cent have M.Phil and rest 4 per cent has PhD.
5. The study shows 76 per cent of the respondents were Assistant Professor, 12
per cent were Professors and the rest 2 per cent were only guest lecturers.
6. Study reveals that 40 per cent of the respondents have an average annual
income below 2 lakhs. 46 per cent of the respondents have an average annual
income between 2-4 lakhs. Respondents having salary between 4-6 lakhs per
annum are 10% and the rest of the 4 per cent have above 6 lakhs.
7. The study shows that all the 50 respondents have savings and investment.

[53]
8. The study shows that the majority of the respondents save and invest in Bank
Deposits by ranking it first and then second comes investment in insurance
and chit funds was their third option and investment in shares comes at fourth
place, while gold and others were ranked fifth and least investment were
made in real-estate and post office.
9. Out of the 50 respondents majority of them gave their main reason behind
their savings and investment for the purpose of better living. Secondly, they
gave the reason to meet the unexpected needs and children’s education was
ranked third. Health was given the fourth rank and use after retirement life
was given fifth and last position was given for purpose of Tax Reduction and
Children’s Marriage.
10. A large number of respondents strongly agree that return, risk and security
were the main factors that influence their investment decision. A good
number of respondents also agree that rate of interest; investing areas and
quality of instruments also affect their investing decisions. 26 per cent, 24
per cent and 20 per cent of the respondents disagrees that investing areas, rate
of interest and influence of family influence them respectively. Only a very
few respondents strongly disagrees that the rate of interest, investing areas
and return influence their investing decision
11. Out of the 50 respondents, 58 per cent of them invest monthly while 28 per
cent invest yearly and 8 per cent of them invest often and remaining 6per cent
invest rarely.
12. The study reveals that 32 per cent of the respondents invest up to 10 per cent
of their annual income while 26 per cent of them invest 10-15per cent of their
annual income. 18 per cent of them save and invest up to 15-20 per cent of
their annual income and the remaining 24 per cent invest more than 20 per
cent of their income.
13. 52 per cent of the respondents rate themselves as a Beginner in investing
filed. 40 per cent of them rate them as Moderators. While 6 per cent of them
rate themselves as somewhat experts and only 2 per cent rates themselves as
experts in field of investing.
14. Out of 50 respondents, 48 per cent of them take decisions after consulting
with the members of the family, while 28 per cent of them take investment
decisions themselves. 12 per cent of them take decisions after consulting with

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 their friends. 6 per cent of them take decisions with the help of internet and
4 per cent of the respondents take investment decision from other sources,
while remaining 2 per cent takes decisions consulting their co-workers.
15. Only 6 per cent of the respondents are highly satisfied with their savings and
investment while 86 per cent were only just satisfied with it. The remaining
8 per cent were dissatisfied with their savings and investment pattern.
16. We can understand that only 6 per cent of the respondents were highly
satisfied with the idea of savings and investment while 86 per cent were just
satisfied with it and the remaining 8 per cent are dissatisfied with this idea.

5.2 SUGGESTIONS

1. Authorities should give proper awareness programs to public regarding

liquidity, income tax benefits, marketability and mutual funds.
2. Government and higher authorities should develop more saving and
investment plans related with children’s future.
3. Give proper awareness regarding the risk associated with saving and
investment.
4. Authorities should develop adequate measures to promote their saving and
investments.

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 CONCLUSION

The project entitled “A STUDY ON SAVING AND INVESTMENT

BEHAVIOUR OF COLLEGE TEACHERS A STUDY RELATED TO SELF-
FINANCING COLLEGES IN CHANGANASSERRY MUNICIPALITY” The study
were conducted on the basis of certain objectives such as, to evaluate the saving habits
and investment pattern, to analyze investment selection behaviour of college teachers,
to study the challenges faced by salaried college teachers in making investment, and to
study how their income are utilized for the purpose of investment. As the study was
based on only fifty teachers the result cannot be generalized. The data was collected
from three main colleges in Changanasserry Municipality. The study concludes that all
the selected samples were having certain savings and investment. And most of them
invests their savings in banks and in insurance. Risk and rate of return were the main
factors than influences the investments. And the authorities should give proper
awareness programmes about investment benefits such as tax benefits, mutual funds,
etc…

[56]
BIBLIOGRAPHY

[57]
JOURNALS:

 Shanthilal Sarupria, Individual Savings in an Under Development

Economy, India A Case Study, The Economic Weekly, June 22, 1963,
pp.995-1001.
 Stovic Paul, Psychological Study of Human Judgment: Implications for
Investment Decision Making, Journal of Finance,Vol.XXVII, No.4,
September1972, pp.772-798.
 Lease Ronald, C.Widbur, G.Lawellen and Gray G.Seharbaum, The
Individual Investor Attributers and Attitudes, the Journal of Finance,
1974, Pp.413-433.
 Bhagawati Prasad, Subha.M.S, Problems Faced by the Investors, The
Management Accountant, Vol.XIX, No.7, 1991, pp. 35-40.
 Shanmugam. R and Muthtusamy.P, Decision Process of Individual
Investors,Capital Market Conference, UTI, 1998.
 Aldus Salam and UmmaKulsun, Savings Behavior in India: An Empirical
Study, The Indian Economic Journal, 50(1), July-September, 2002,
pp.77-80.
 Rajarajan,V, Investors Demographics and Risk Bearing Capacity, Finance
India, 17(2) June 2003, pp.565-576.
 Challan.G.V, Investors Behavioural Pattern of Investment and their
Preference of Mutual Funds, Southern Economists, 41(19) February, 1,
2003, pp. 13-16.
 Jospal Singh, A Study about the Perceptions of Small Investors, Journal
of Management, June 2006 pp.34.
 Kalavathy.S, A Study on the Savings and Investment Behaviour of Salaried
Person, Ph.D Thesis Submitted to Bharathiar University, Coimbatore, 2009.
 Dr. SunnyKutty Thomas and M.N. Rajesh, Investment Pattern of Rural
Investors in Kerala”, Southern Economist, April 1 and 15, 2009.
 Sanjay Kanti Das, Middle Class Household‘s Investment Behaviour: An
Empirical Analysis, A Journal of Radix International Educational and
Research Consortium, September 2012, Volume 1, Issue 9, ISSN: 2277-
100X.

[58]
BOOKS REFERED:

 Bhalla V.K, “Investment Management”, S.Chand and company Ltd, New

Delhi, 2004.
 Prasanna Chandra “Managing Investments”, Tata- McGraw Hill publishing
Company Limited, New Delhi, 1998.
 Preeti Singh, “Investment Management” Himalaya Publishing House, New
Delhi, 2006.
 Rustagi R.P, “Investment Management” Investment Analysis and Portfolio
Management”, Sultan Chand and Sons, New Delhi, 2007.
 V.A. Avadhani, “Investment Management” Himalaya Publishing House,
New Delhi, 2009.

WEBLIOGRAPHY:

 www.investopedia.com
 www.slideshare.com
 www.abhinavjournal.com
 www.businessdictionary.com
 www.shodhganga.inflibnet.ac.in

[59]
APPENDIX

[60]
 QUESTIONNAIRE

A STUDY ON SAVING AND INVESTMENT BEHAVIOUR OF COLLEGE

TEACHERS (A STUDY RELATED TO SELF-FINANCING COLLEGES IN
CHANGANASSERRY MUNCIPALITY)

1. Age: 20 – 30 30 – 40 40 – 50 above 50
2. Gender: Male Female
3. Marital Status: Unmarried Married
4. Educational Qualification: PG PhD M.Phil (mention the
last qualification only)
5. Employment Status: Assistant Professor Associate Professor
Professor Guest lecturer

6. Annual income: below 200000 200000 – 400000

400000 – 600000 above 600000
7. Do you have any kind of saving or investment?
Yes No
8. If yes, where do you save and invest (rank them like 1, 2, and 3)
Share: Real Estate:
Debenture: Post office savings:
Mutual Fund: Chit Funds:
Bank deposit: Antiques:
Insurance: Others:
Gold:
9. Why do you save and invest? (Rank them)
Children’s education Retirement life
Better living Children’s marriage
Health Unexpected needs

Tax Reduction

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 10. Make your opinion on the influence of the factors given below on the
investment decision of a person.

Strongly agree Agree Disagree Strongly disagree

Risk

Return

Quality of instruments

Influence of family

Security

Rate of interest
Investing areas

11. How frequently do you invest?

Often Monthly Yearly Rarely
12. What per cent of your annual income do you invest?
Up to 10 per cent 10 – 15 per cent
15 – 20 per cent more than 20 per cent
13. How do you rate yourself as an investor?
Beginner Moderator somewhat expert Expert
14. How do you take your investment decision?
Self Co – worker Friends Internet Family Other means
15. What is your level of expectation in saving and investment?
Satisfied Highly satisfied Dissatisfied
16. Make your level of satisfaction on the following:
Satisfied Dissatisfied
(a) Income from investment
(b) Availability of alternatives
(c) Support from Govt. / other agencies

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