Personal Investment Literacy Among College Students: A Survey

This study examines college students ' knowledge of personal investment and the relationship between the level of itnestment literacy and getider. academic disciplitie, and experience. Thefitidings suggest that college students have inadequate knowledge of personal investmetu. The problem spreads across a broad spectium of college students of both genders, various academic disciplines, atid experience groups. Consistent with previous studies, the results have shown that female students are le.^s knowledgeable about investing than male students. Non-business majors are less knowledgeable than business majors. Within the biisitiess majots, twn-financelaccoutring majors are less ktwwledgeable than fttiancelaccounting majors. The differetices between these groups are.statistically significant. Thefttidings suggest that illiteracy of personal investment exists among college students and the issue needs to be addressed. • The importance of personal investment decisions cannot be overemphasized because they have a direct impact on people's quality of life. Such decisions include accumulating funds for a down payment for a home or an automobile, a child's education, personal goals/dreams, and retirement. According to recent national surveys conducted by the National Endowment for Financial Education, personal investment advice is the most frequent request made by the public. From 1991 to 1995, about 70 to 80 % of the surveyed financial planners responded that they provided investment advice to their clients and the demand for such advice has increased steadily (NEFE, 1993,1994, and 1995). Take retirement funding for example. Companies have been switching their defined benefit pensions to defined contribution plans, which are primary firm-sponsored vehicles for retirement. This change makes employees' retirement benefits depend on their investment decisions. Not properly informed, many Americans have made costly mistakes such as investing too conservatively for thei