A STUDY ON THE PRACTICE OF PERSONAL FINANCIAL PLANNING AND

FAMILY FINANCIAL INVESTMENT IN KUALA LUMPUR

HAWA YUSUF MOHAMED

SUPERVISED BY:

ASSO.PROF.DR. MANJARI SHARMA

PROJECT SUBMITTED IN PARTIAL FULFILMENT

FOR THE DEGREE OF MASTER OF BUSINESS

ADMINISTRATION

FACULTY OF BUSINESS & ACCOUNTANCY

LINCOLN UNIVERSITY COLLEGE

MALAYSIA

JUNE 2016

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A STUDY ON THE PRACTICE OF PERSONAL FINANCIAL PLANNING
AND

FAMILY FINANCIAL INVESTMENT IN KUALA LUMPUR

HAWA YUSUF MOHAMED

0123150511345

SUPERVISED BY:

ASSO.PROF.DR. MANJARI SHARMA

PROJECT SUBMITTED IN PARTIAL FULFILMENT

FOR THE DEGREE OF MASTER OF BUSINESS

ADMINISTRATION

FACULTY OF BUSINESS & ACCOUNTANCY

LINCOLN UNIVERSITY COLLEGE

MALAYSIA

JUNE 2016
2
 Certification of project work

I have seen and read the final draft of the below student‘s project paper and, in accordance with
the requirement of the faculty guidelines certify that:

I am satisfied that this thesis, prima facie, is worthy of examination both in terms of its content
and its technical.

Date: Signature : Supervisor: Asso. Prof. Dr. Manjari Sharma

Name: Hawa Yusuf Mohamed Department of Business Administration
Matric No: 0123150511345 Faculty of Business and Accountancy
Lincoln University College, Malaysia

Prof. Dr. Abhijit Ghosh

Dean
Faculty of Business and Accountancy
Lincoln University College, Malaysia

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 Declaration

I hereby declare that this thesis is based on my own independent work, except for
quotation and summaries which have been dully acknowledged. I also declare that no part of this
work has been submitted for any degree to this or any other university.
HAWA YUSUF MOHAMED

Signature: ………………….

Date: June 23, 2016

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 PERMISSION TO USE

In presenting this project submitted in partial fulfillment for the degree of master of business
administration faculty of business and accountancy in Lincoln University College Malaysia, I
agree that the University Library make it freely available for inspection. I further agree that
permission for copying of this project in any manner, in whole or in part, for scholarly purpose
may be granted by my supervisor or, in his absence by the Dean Faculty of Business and
Accountancy.

It is understood that any copying or publication or use of this project or parts thereof for financial
gain shall be given to me and to Lincoln University College for any scholarly use which may be
made of any material from my project.

Request for permission to copy or make other use of materials in this project paper, in whole or
in part should be addressed to:

Dean of Faculty of Business and Accountancy.

Mayang Plaza Block A, 1, Jalan SS 26/2,

Taman Mayang Jaya, 47301 Petaling Jaya,

Selangor, Malaysia.

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 ACKNOWLEDGMENT

Firstly, thanks to the almighty Allah (S.W.T), for His providence and protection throughout my
years of study and for His showers of blessings throughout my research work to complete the
research successfully. Secondly, there are no proper words to convey my deepest gratitude and
respect for my thesis and research supervisor ASSO.PROF. DR. MANJARI SHARMA, for her
invaluable suggestions, inspiring guidance, encouragement, supervision and generous support
given to me for the successful completion of my thesis.

Thirdly, I would like to thankful LINCOLN UNIVERSITY COLLEGE and the Librarians at
Lincoln, There is no way to express how much it meant to me to have been a student at
LINCOLN UNIVERSITY COLLEGE ,Not forgetting to thanks all my lecturers. And my dear
classmates. I always fall short of words and felt impossible to describe my family especially to
my dearest sister Halima Yusuf Mohamed for her support and love.

Finally my special appreciation is also due to my beloved husband Abdulkadir Farah wali for
his loving, helping, advice and financial support.

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 DEDICATION

I dedicate this thesis to my parents.my beloved father Yusuf Mohamed Adam and my sweet
mother Anbara Rabah Ubahle.

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 ABSTRACT

This research investigates the practice of personal financial planning among individuals and
households in Kuala Lumpur. The objective of project is to examine whether practice of personal
financial planning has significant influence of family financial investment in Kuala Lumpur
according to their demographic characteristics and to explore the key factors that influence
family financial investment and to examine the relationships and significant of these independent
variables; practice of personal financial planning, knowledge of personal financial planning,
financial literacy, strategic investment planning, cultural influence on personal financial planning
in determining the family financial investment . Questionnaires were sent to 122 respondents at
different public area in Kuala Lumpur as a quantitative research. The analysis result shows that
the family financial investments were strong significantly related to knowledge of personal
financial planning, financial literacy, and cultural influence on personal financial planning where
the strategic investment planning and practice of personal financial planning were not
significantly related to family financial investment .

The implication of the findings is that household should be exposed with some financial
knowledge to encourage them to have financial investment for the family as well as for their
future.

Keywords: financial plan, practice of personal financial planning, knowledge of personal

financial planning, financial literacy, strategic investment planning, cultural influence on
personal financial planning and family financial investment

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Contents
Certification of project work ......................................................................................3
Declaration .................................................................................................................4
PERMISSION TO USE .............................................................................................5
ACKNOWLEDGMENT............................................................................................6
DEDICATION ...........................................................................................................7
ABSTRACT ...............................................................................................................8
CHAPTER ONE ......................................................................................................15
CHAPTER ONE ......................................................................................................16
1.0 INTRODUCTION .............................................................................................16
1.1 Problem statement ..............................................................................................17
1.2 Objectives of research ........................................................................................18
1.2 Research question ..............................................................................................18
1.4 Scope of the Study .............................................................................................19
1.5 Significance of the Study................................................................................19
1.6.1Family financial investment .............................................................................19
1.6.2 Practice personal financial planning .............................................................................................. 20

Definition of personal finance .................................................................................20

Among the most significant features of personal finance are: ................................................................ 20
1.6.3 Knowledge of personal financial planning .................................................................................... 20
1.6.4 The Concept of Financial Literacy................................................................................................. 21
1.6.5 Strategic investment planning ........................................................................................................ 21
1.6.6 Cultural influence on personal financial planning ......................................................................... 21

1.7 Conclusion .........................................................................................................22

Chapter two ..............................................................................................................24
Literature review ......................................................................................................24
2.0 Introduction: .......................................................................................................24
2.1 finding literature review .....................................................................................26
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2.2. among grounded theories of this research ........................................................30
2.2.1Theory one ...................................................................................................................................... 30
2.2.2 Theory two ..................................................................................................................................... 31
2.2.3 Theory three ................................................................................................................................... 31
2.2.4 Theory four .................................................................................................................................... 31
2.2.5 Theory five ..................................................................................................................................... 31
2.2.6 Theory six ...................................................................................................................................... 32

2.3 Personal financial planning in Malaysia ............................................................32

2.3.1 Personal Finance ..................................................................................................................... 32

2.4Financial literacy .................................................................................................34

2.4.1Components of Financial Literacy .................................................................................................. 34
2.4.2 Core Competencies ................................................................................................................. 35
2.4.3 expressed Mathematical skills/Ability ........................................................................................... 35
2.4.4 Budgeting Planning ........................................................................................................................ 35
2.4.5 Saving ............................................................................................................................................ 36
2.4.5.1 Make Saving a Priority ........................................................................................................... 36
2.4.6 Borrowing ...................................................................................................................................... 36
2.4.7 Investing......................................................................................................................................... 37
2.4.8 Proficiency. .................................................................................................................................... 37
2.4.9 Skill and confidence ....................................................................................................................... 37
2.4.10 Opportunity to Acquire and Use Competency and Proficiency ................................................... 38
2.4.11 Measuring Financial Literacy ...................................................................................................... 38
2.5 Knowledge of personal financial planning ....................................................................................... 39

2.6 strategic investments planning .........................................................................40

2.6.1 Predictable returns ......................................................................................................................... 41
2.6.2 Predictable risk............................................................................................................................... 42
2.6.3 Investment constraints ................................................................................................................... 42
2.6.4 Business structures ......................................................................................................................... 43
2.6.5 Types of Investment Strategies ...................................................................................................... 43

2.7 culture influence on personal financial planning ...............................................44

2.7.1Multicultural Society ...................................................................................................................... 45
2.7.2 Respect for all ................................................................................................................................ 46

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 2.7.3 Why culture can matter for finance................................................................................................ 47

2.8 Family financial Investments .............................................................................48

2.8.3 Factors to Consider Before Making a Family Investment ...................................................... 49
2.8.4 Preparing for higher education Investment Plans .......................................................................... 49
For children investment education needs to invest: ................................................................................ 50

2.8.5 A Family financial roadmap: ..........................................................................51

2.8.6 Family financial investment planning ............................................................................................ 51

CHAPTER THREE..................................................................................................53
RESEARCH METHODOLOGY.............................................................................53
CHAPTER THREE..................................................................................................54
RESEARCH METHODOLOGY.............................................................................54
3.0 Introductions ......................................................................................................54
3.1 Research methodology .......................................................................................54
3.2 The Importance of Quantitative method: ...........................................................55
3.3 Research Design .................................................................................................56
3.4 Theoretical frame work ......................................................................................56
3.4.0 Development model ........................................................................................57
3.5 Hypothesis ..........................................................................................................57
3.6 Field works .........................................................................................................58
3.7. Variables and measurement ..............................................................................59
3.7.0 Demographic characteristics of the Respondents ...........................................59
3.7.1 Family Financial Investment .......................................................................................................... 59
3.7.2 Practice of personal financial planning .......................................................................................... 60
3.7.3 Knowledge of personal financial planning .................................................................................... 60
3.7.4 Financial literacy ............................................................................................................................ 61
3.7.5 Strategic investment planning ........................................................................................................ 62
3.7.6 Cultural influence on personal financial planning ......................................................................... 62

3.8 Data Collection Method .....................................................................................63

3.8.1 Primary Data .................................................................................................................................. 63
3.8.2Secondary data ................................................................................................................................ 63

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3.9 Sample profile ....................................................................................................63
3.9.1 Sample Size.................................................................................................................................... 64
3.9.2 Sampling Technique ...................................................................................................................... 64
3.10 The pilot study ................................................................................................................................ 64

3.11 Data Analysis ...................................................................................................64

3.12 Descriptive Statistics ........................................................................................64
CHAPTER FOUR ....................................................................................................66
DATA ANALYSIS ..................................................................................................66
Chapter four .............................................................................................................67
Data analysis ............................................................................................................67
4.0 introduction ........................................................................................................67
4.1 frequencies analysis ...........................................................................................68
4.1.1 Gender ............................................................................................................................................ 68
4.1.2 Respondent Ethnic ......................................................................................................................... 68
Table 2: Ethnic ........................................................................................................................................ 68
4.1.3 Respondent Age ............................................................................................................................. 69
Table 3: Age............................................................................................................................................ 69
4.1.4 Respondent education .................................................................................................................... 69
Table 4 EDUCATION LEVEL............................................................................................................... 69
4.1.5 Employment state........................................................................................................................... 70
Table5: Employment Status .................................................................................................................... 70
4.1.6 Marriage status ............................................................................................................................... 70
Table6: Martial Status ............................................................................................................................. 70
4.1.7 Income per month .......................................................................................................................... 70
Table 7: Income per Month..................................................................................................................... 71

4.2 Reliability analysis .............................................................................................71

4.3 Descriptive statistics ..........................................................................................72
Table 9 descriptive statistics ................................................................................................................... 73

4.4 THE HYPOTHESIS TEST ................................................................................73

4.4.1 Correlation ..................................................................................................................................... 73
Tale 10 Pearson‘s indices of correlation ................................................................................................. 73

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 Table 11 correlation ................................................................................................................................ 75

4.5. Multiple regression analysis .............................................................................76

4.5.1. Model summary ............................................................................................................................ 76
4.5.2. ANOVA ........................................................................................................................................ 76
Table 13 ANOVA ................................................................................................................................... 77
4.5.3. Coefficient table ............................................................................................................................ 77
Table 14: Multiple regression analysis: .................................................................................................. 78
Table 15 Coefficient ............................................................................................................................... 78

4.6. Hypothesis testing: ............................................................................................79

Table 16 Hypothesis Analysis ................................................................................................................ 79

Variables ..................................................................................................................79
Hypothesis ................................................................................................................79
T-value .....................................................................................................................79
P-Value.....................................................................................................................79
Testing ......................................................................................................................79
Decision....................................................................................................................79
Table 17 Summary of the hypothesis testing .......................................................................................... 79

NO ............................................................................................................................79
Hypothesis ................................................................................................................79
RESULT...................................................................................................................79
5.11. Conclusion: .....................................................................................................80
CHAPTER 5 ............................................................................................................81
CHAPTER 5 ............................................................................................................82
5.0 Introduction ........................................................................................................82
5.1 discussion the factors that influence on family financial investment ................82
5.2. Recommendations: ............................................................................................84
5.3 Limitations of the study .....................................................................................84
5.3.1 Insufficient source:......................................................................................................................... 85

5.4 Conclusion .........................................................................................................85

5.5 References ..........................................................................................................86
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Bibliography.............................................................................................................86
5.6 APENDEX .........................................................................................................89
A bout a researcher: .................................................................................................89
Section A: Personal Information ..............................................................................90
Strategic Investment Planning .................................................................................94

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CHAPTER ONE
INTRODICTION

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 CHAPTER ONE

1.0 INTRODUCTION
The objective of this research is to investigate whether practice of personal financial planning
has significant influence of family financial investment in Kuala Lumpur. Financial planning
helps you to determine your short and long-term financial goals and create a balanced plan to
meet those goals. In fact, the perfect of personal financial plan allows the individual to be
mindful in ways which they deal with financial matters. It is a means to guide an individual‘s
financial decisions and highlight the consequences of such decisions on other areas of one‘s
finances (The Malaysia Financial Planning Council, 2004).

Ironically, the establishment of an ISO defining personal financial planning as a service rather
than an occupation or profession was the result of efforts by the U.S.-based CFP Board, an
organization claiming that financial planning is a profession rather than a commercial service,
product, or activity (Brandon & Welch, 2009). While the International Organization for
Standardization and the CFP Board has a clearly defined set of ―best practice‖ standards for the
service of personal financial planning, there is a striking absence of a common definition for
financial planner.

First of all it creates awareness among existing and potential financial individuals of ways to
achieve better lifestyle. Second, it provides useful insights to family financial investment and
professionals in evaluating effective ways to convey financial knowledge and product
information to their family so as to deliver better financial invest to them. Third, it highlights
existing gaps of the practice of personal finance and enables them to make informed judgment
and decisions on actions necessary to improve the existing practice in the personal financial
planning. The growth of the practice of financial system should be ultimately anchored to the
growth in the real sector though they are aware of the importance of personal financial planning,
many Remain lacking in thorough understanding of the significance of personal financial
planning and of the numerous benefits that may be derived from such planning (Citi, 2008) so
that in this study will investigate how the family handle their financial investment, there is a
need for financial planning in order to optimize and align your cash flows and future goals.

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Most of the respondents answered in similar ways regarding to practice personal financial plan.
So, can interpret that their idea of what it means to be financially independent is by having
financial plan for long term and also to make money for example by doing business‖ this shows
that financial planning is something suited for everyday life style and that any one is capable of
it. During my survey I discussed some people who are experienced in the field of finance said‘
The main steps that helped me to be financially independent are by using my money properly
and by making some savings plan for future use‖; in this life journey by living a successful,
enjoyable, and happy life is about achieving a proper balance between time spent on making
money and spending it while saving intelligently.

Basically it‘s about striking a proper balance between your life today and your future; because
financially we can't live for the present alone. Finding the correct balance is an important first
step toward achieving financial security and independency. You can work on becoming
financially independent in your spare time, which will allow you to keep the security of a regular
paycheck while making progress toward your goal at the same time.

1.1 Problem statement

The intention of this research is to figure out the factors that influences practice of personal
planning and family financial investment in Kuala Lumpur with in their families and business
sectors. And to criticize together the issues faced during their practice as well as investigating
through all variables one by one.

Financial problems are a public obstacle in today‘s society. Financial troubles such as
plummeting behind in paying the bills, amassing trust card liability, or being compelled to locale
a subsequent mortgage on a house transpire to people every day.

Nowadays many families who face financial difficulties because of some family members do not
understand their financial plan or saving plan and their current situation. If family memberships
don‘t discuss things about the future financial plan, even the most workable spending plan is
destroyed the rest of their future. The purpose of this study is to highlight; how they practice in
terms of individual financial plan and family investment.

The family financial problems i may be experienced a financial crisis when a reduced income
level or unemployment the heard of the family member like father or disability things happened

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and not being able to cover basic living expenses and credit debt and children education plan,
this is the worst time situation for families. It is easy to feel overcome any financial problems if
you have personal financial plan and starting early your family financial investment and there is
no any pressure affect you and your family.

The problem statement of this study will provide a relevant and specific data by identify and
highlighting the current issues and its solutions on the practice of personal financial planning and
family financial investment. And the other hand this study is focusing on the level of personal
awareness of financial planning and being comfortable with own planning efforts and it‘s
benefits for the society as well1.

1.2 Objectives of research

 To explore the key factors that influence family financial investment.
 To examine the actual factors that influence of family financial investment among these
variables.

The researcher investigates whether the variables have strong factors to influence, therefore,
practice of personal financial planning, and knowledge of personal financial planning; financial
literacy, strategic investment planning, and cultural influence on personal financial planning
become the main factor to be studied and to achieve the main objective of the study.

1.2 Research question

 Is there a significant positive relationship between practices of personal financial
planning towards family financial investment?
 Is there a significant positive relationship between knowledge of personal financial
planning and family financial investment?
 Is there a significant positive relationship between financial literacy and family
financial investment?
 Is there a significant positive relationship between strategic investments planning
towards family financial investment?
 Is there positive connection between cultural influences on personal financial
planning to influence family financial investments?
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1.4 Scope of the Study
The scope of study is focus on to a research framework which assesses extremely independents
and dependent variables and significant factors relationship to family financial investment .and
also is to address on directly which is the most suitable factors that contribute to family financial
investment

1.5 Significance of the Study

This is one of the first few studies of its kind in Malaysia and with critical analysis towards
improving the variable operations. Therefore the information and data generated could prove to
be useful for future researchers. Financial planners from the various industries such as insurance,
unit trust and financial institutions can develop specific strategies to target this particular
segment of individuals in the society. The study is also expected to make some contribution as
follows:

 To improve the quality of practicing personal financial planning and family financial
investment in Malaysia.
 To enhance the level of family financial investment to develop their future plan.
 To have the proper financial plan coverage and policies that can provide peace of mind.

1.6. Definition of key variables:

There are several key variables in the present study. They are defined as follows:

 Dependent

1.6.1Family financial investment

Are private wealth management advisory firms that serve ultra-high net worth investors .Family
financial investment are different from traditional wealth management shops in that they offer a
total outsourced solution to managing the financial and investment side of a wealthy individual
or family. For example, many families offer budgeting, insurance, charitable giving, family-
owned businesses, wealth transfer and tax services.
Family financial investment would allow the family members to personalize their own asset
allocation by having one family member hold shares in Class A, B, D and E, while another
family member might hold Class A and C shares.

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  Independent

1.6.2 Practice personal financial planning

Practice personal financial planning (ppfp) is a process through which a client‘s financial
situation is assessed, goals are identified, and strategies for achieving those goals within a stated
time frame are developed. PFP also provides for implementation and periodic monitoring

Definition of personal finance

Personal finance explain all financial determination and activities of an individual or family,
covering budgeting plan, individual or household insurance , mortgage planning, savings and
retirement planning.
Another hand personal finance is all about personal financial accomplishments fall under the
personal responsibility; personal financial planning generally contains examining your current
financial position, forecasting your future plan either short-term and long-term needs and
completing a plan to fulfill those requirements and personal goals and desires.

Among the most significant features of personal finance are:

 Evaluating your current financial position – take a look at future expected cash flow,
current savings, etc.
 Create insurance plan to protect yourself as well as family from risk and make sure
your material status is secure
 Calculating and filing taxes
 Capitals and future investment plan
 Retirement planning

1.6.3 Knowledge of personal financial planning

An important aspect of proficiency is the level of financial knowledge of the people. This refers
to a person‘s level of knowledge of the core competencies and the conviction that financial
knowledge will lead to financial wellbeing. Everyone should have some aspects of knowledge
financial planning to handle his/her financial perspectives; you need to have ability, skills to
pursue your life journey in financial freedom, free of debt and peace of mind. So financial
accounting is the language of business, if you don‘t have the knowledge to understand the
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language and speak it probably, then you can‘t communicate with those who are the source of
capital. Regarding to financial Knowledge is base connects a business to the outside world

1.6.4 The Concept of Financial Literacy

Definitions of financial literacy exist in the literature. Basically ‗financial literacy‘ refers to the
knowledge and understanding of financial concepts there by resulting in the ability to make
informed, confident and effective decisions regarding money.

1.6.5 Strategic investment planning

Investment Strategy is typically measured to be a part, more of a branch of finance than
economics. Investment strategy is defined as set of rules, a definite behavior or a technique
guiding an investor to choose his investment portfolio. For e.g. investing in mutual funds has
recently emerged as a very favorable investment strategy.

An investment strategic planning in public funds is plausibly the best bet for a profitable
investment. Public funds are described as a pool of money supplied by disparate financiers and in
coil utilized by the public fund firm to invest in assorted assets such as stocks and bonds.
Analyses from marketplace researchers concerning the forecasted upcoming trends ought to
additionally be believed or else gains from capital appreciation; capital gain allocation and
dividends could not be realized.

1.6.6 Cultural influence on personal financial planning

Culture is a concept that has been studied, researched and discussed for thousands of years. It
influences every aspect of society, far beyond what is commonly recognized. Many papers have
been written and studies completed to understand the facets that culture permeates. A recent and
highly recognized in-depth study of culture was conducted by Geert Hofestede in the early
1980s.
Some people like Malaysia live in sophistications and societies alongside incentives and attitudes
that promote good cultural influences on personal financial planning as well as the family
financial investment, there is another research who has clarified that sophistication the cultural
influences and faith are key community that set a part that work together for affecting beliefs and
behaviors.so in the finding prove that cultural influence on personal financial planning have
significant relationship with family financial investment .

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1.7 Conclusion

The overall of this chapter discussed about the general overview of practice of personal financial
planning and family financial investment in kuala lumpur, Malaysia and also this chapter gives
wide explanation about the actual that factors that influence family financial investment .On the
other hand the first chapter discusses the objective of this research including the problem
statement, research questions, scope of the study, and the significant of the study.

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 CHAPTER TWO
LITERATURE REVIEW

23
 Chapter two

Literature review

2.0 Introduction:
This chapter aims to provide background information on the subject area based on the relevant
previous literature to fulfill the aims. This study will deeply focusing on variables of the
following; practice of personal financial planning, knowledge of personal financial planning,
financial literacy, strategic investment planning, cultural influence on personal financial planning
, and family financial investment. It defines and places the personal financial planning process in
a service system model and develops within the framework component mentioned in chapter
three.

The best way to achieve financial stability is to create a budget and develop a spending plan to
get rid of debt and save money. Financial stability is achieved when you are able to meet day-to-
day financial obligations, which include establishing a savings plan, reducing debt to a
controllable level, and establishing an emergency fund equal to 3-6 months‟ living expenses
(CSREES, 2002).

In this study should provide and highlight the way of personal financial practice and family
financial investment in order to help the individuals to live confortable life as well as the family.
This research aims to gather, analyze, and integrate the data and information needed to make
high-quality of personal financial planners and family financial investment.
The family business may range starting from the small corporation with ‗Mom and Dad‘ store to
the large multinational company. For example from this year I would like to establish own
family business and investment to achieve the target goal of my future and to live our retirement
age a lot of enjoyable time with financial security and and peace of mind. A family firm is one in
which at least 50% of the ownership and management falls within one family – whether related
by blood or marriage (Lee-Chua, 1997).the family financial investment is extremely very
important especially to household and the society in general.

The family business is a business managed with the intention to shape and pursue the vision of
the business held by a main partnership controlled by members of the same family or a small

24
number of families in a manner that is potentially sustainable across generations of the family or
families‖ (Chua, Chrisman, & Sharma, 1999).

A typical approach to personal financial planning involves effective utilization of savings to

accumulate wealth, followed by careful preservation of such wealth against value depreciation
and losses, and finally distribution of wealth at a later stage of one‘s life (Malaysia Financial
Planning Council, 2004).
Personal finance practice should have a plan, knowledge skills, ability to perform and take the
best decision and create value how to reach the highest position of his/her journey through the
life cycle. For the family financial investment is the corporation is an investment enterprise that
association and determined, innovative spirit and a thorough financial knowledge of investing in
Kuala Lumpur.
For example the researcher of this project have been planned to establish a family financial
investment in January 2018, the place of my near future investment is in Somalia, so to invest
has been very active in developing many different new projects. Kuala Lumpur investors invest
in ventures which can deliver superior returns to its shareholders.
Such planning reflects an individual‘s‟ current state of play and how individuals plan to
progressively develop and build their capacity in managing financial needs with respect to credit
and cash management, tax planning, insurance, risk management, and investment, as well
retirement and estate planning (Malaysia Financial Planning Council, 2004).Such effort would
inevitably provide individuals with a great sense of security and an ultimate goal of financial
freedom (Cheah, et al. 1998).

According to Ron blue with Jeremy white, financial goals set as a family; I‘ve seen the power of
goal setting work to my advantage and the advantage of many clients. Another hand some people
acting totally different from above mentioned and they don‘t set any goals concerning their
future financial plan or family financial investment at all, and they suffer for it. Others go to the
opposite extreme and set ambitious financial goals with regard to family goals.

Let us say the both educated spouse required to have a certain amount of income per year to
develop their future plan. It‘s good to have financial goals to put too much time for your
financial plan and investment as well as in a retirement plan then you may be sacrificing in other

25
 important areas, such as family time, health, before everything else Set family goals first, and
then let the financial goals be a subset of the family goals.

Malaysian society is a multi-ethnic society with Malays, Chinese and Indian dominating
economics and politics in Malaysia. Ethnicity acts as a suitable surrogate for culture in Malaysia
which has a multiracial society, each section of which still maintains its own unique ethnic
identity and values. ((Reinicke1998)

This study uses to describe the component of excellence model as a measure for independents
and dependent variables as well as to examine the relationship between the variables.

2.1 finding literature review

No Author Objectives Variables Method Finding
. and date

1 Tan hui This study aims to (1)examine the Independent Quantitativ The findings suggest that in contrast to
boon*, hoe relationship of personal financial Financial literacy e their non-financially literate counterparts,
siewyee and literacy and financial planning; and Dependent methodolo the readiness of the financially literate
hung woan (2) on the basis of the existing Personal financial gy individuals is reflected in their
ting financial literacy level, to explore planning involvement in the multiple aspects of
2011 public perceptions on the major personal financial planning
aspects of personal financial
planning in Malaysia
2 Denyelle The objective should be to match Independent Qualitative -------------------
Baete your family‘s spending to your Family Financial Methodolo
Kenyon, current income. Combine Management gy
LYNNE M. information about your family‘s Dependent
BORDEN income and expenses from your Planning for the
10/2004 previous budget and make Future
adjustments according to expense
goals, debt reduction goals, and
savings goals
3 Chris To examine factors that enable Independent Qualitative Analysis suggests that the entrepreneur‘s
Perryer1 , retirement and trigger family Management methodolo ability to find an identity outside the
Jonathan Te business succession, using the Push- succession in Chinese gy business is the key to meaningful
Dec 2010 Pull Model described by Dana family owned retirement, which in turn enables
(2005) businesses generational transition in the management
Dependent of the company. .
Pull-push
4 Yughee What are the key factors which Independent Quantitativ Findings from this study show that first
Wee, determine the successful continuity Family Business e generation owner selected their successor
Mohamed of family business across Dependent methodolo based on competencies and many
Dahlan Bin generations in Kelantan? This Management gy successors, while in the presence of the
Ibrahim research identifies the key success Practices, Growth founder or predecessor, enjoy full

26
 factors by examining the and Succession authority and freedom in managing their
management practices of these Issues businesses.
family businesses; determining the
potential growth and development
by probing into business problems
and concerns faced; and addressing
the intergenerational-transition
issues in family businesses.
5 Ron blue To use of God-given gifts and Dependent Quantitativ Faith-Based Family Finances is the result
with Jeremy resources (time, talent, treasure, Faith-Based Family e of the journey the Lord has brought me
l. White, truth, relationships) for the Finances methodolo through. I‘ve tried to bring together in
CPA accomplishment of God-given goals Independent gy one book all the learning, advising,
2008 and objectives. Let Go of Worry and counseling, and teaching i‘ve done for
Grow in Confidence over 40 years.
6 Hafiza The purpose of this study is to Independent Quantitativ The finding of this study suggests that the
Aishah investigate whether financial The Influence of e quality of financial reporting cannot be
Hashim1 reporting quality relates to national Culture on Financial methodolo culturally free and is impacted largely by
October 19, culture Reporting gy government policy. This study offers an
2012 Accrual quality alternative explanation on the association
Dependent between governance and financial
Race of the chairman. reporting quality by examining the role of
Race of the CEO and ethnicity that explicates the unique
Racial composition institutional context of an Asian country.
7 Hugh The purpose of this research was to Independent Quantitativ The research successfully identified four
Crankshaw establish principles that Financial Personal Financial e components and twenty principles of
November Planners could use to improve Planning: methodolo practice management, as well as three
2006 service delivery to the individual. Dependent Strategies gy demographic drivers of income and
for Successful succeeded in meeting the research
Practice Management objectives.
8 Natalie This research addresses a gap in the Independent Qualitative Findings from international and
Gallery literature by examining financial Framework for methodolo Australian studies show that financial
,Cameron literacy and investment decision- Assessing Financial gy illiteracy is wide-spread. Given the
Newton making in the unique setting of the Literacy potential significant economic and social
,Chrisann Australian superannuation system. Dependent consequences of poor financial decision-
Palm Superannuation making in superannuation matters.
2011 Investment Choice
Decisions
9 KWAME The purpose of this study is to Independent Quantitativ The findings of this study suggest that the
mireku june provide evidence of finance literacy Academic discipline, e data financial literacy of university students in
2015 among university students in Ghana. level of student, through a Ghana is low. Students exhibit moderate
To examine students understanding gender, work survey knowledge in savings and borrowing but
of and knowledge in money experience, age, instrument. low level of knowledge in other finance
management, savings and income, family issues
borrowing, investment and characteristics,
insurance. residential
characteristics and
financial market
participation
Dependent
Financial literacy

27
 among university
students in Chana.

10 Yunosuke In this report we look at the current Independent Quantitativ Finding that positions tend to build up in
Ikeda level (and the factors behind the Japanese Retail e inquiry currencies (1) from countries with high
Masanari sharp increase in recent years until Investment in through policy interest rates, (2) that deviate
Takada 2007) of Japanese retail investment Overseas Securities survey data downward from the moving average and
in foreign currency assets. Dependent collection thus look undervalued, and (3) that have
FX Margin Trades high liquidity.
11 SANDRA J. The purpose of this article is to Dependent Data (95%) Presents a summary of the instrument
HUSTON examine previous literature to Measuring Financial was evaluation categories from each of the
identify obstacles, and propose an Literacy obtained fifty-two data sets used by the seventy-
approach, to develop a more Independent telephonic one studies selected for this analysis.
standardized measure of financial Financial education surveys.
literacy.
12 Annamaria This paper undertakes an Independent Qualitativ These findings might suggest that
Lusardi and assessment of a rapidly growing The Economic e method financial literacy is more easily acquired
Olivia S. body of economic research on Importance of through via interactions with others, in the
Mitchell financial literacy. Financial Literacy interview. workplace or in the community.
2014 Dependent
Theory and Evidence
13 Sandra The objective of the study was to Independent Qualitative Finding the study of effectiveness of
Braunstein determine whether prepurchase Financial Literacy method financial literacy training have been
and Carolyn home ownership counseling Dependent through mixed. Although some programs,
Welch affected ninety-day delinquency An Overview of national particularly those having discrete
rates and whether effectiveness Practice, Research, survey. objectives, have succeeded in improving
varied with training format and Policy certain aspects of consumers' personal
(individual counseling, group financial management
classes, home study, or telephone
counseling).
14 NURULHUO The objectives of the study are to Independent Quantitativ The regression results showed individual
AABORAHM compare level of financial Demographic e method differences such as self-efficacy, locus of
AN knowledge of university students characteristics through control are significantly related to
,NORILMIAH according to demographic Locus of control questionnai financial knowledge and financial
AZIS, MOHO characteristics, to examine the Self-efficacy re survey. behavior
NIZAL HANIF relationships of self-efficacy and Dependent
locus of control on financial Financial financial
28
behavior and knowledge and to Knowledge behavior
December
examine the relationship of personal
2009
financial knowledge on financial

28
 behavior.
15 Rene M. Our aim is to test whether simple Independent Qualitative Finding support for the view that culture
Stulz ! A,*, culture proxies can help explain the Culture, openness, method of matters, but there is also evidence that the
Rohan diversity in the protection of Dependent observation impact of culture is tempered by
Williamson investor rights consistently across Finance among openness. The culture proxies do not
2002 countries various explain cross-country variation in the
countries shareholder rights index, but they explain
cross-country variation in individual
shareholder rights even when we control
for the origin of a country‘s legal system.
16 Beate Reszat One facet of this change is the Dependent Qualitative The paper analyses these two sides of
2000 relation between culture and Culture and Finance method interaction between finance and culture
finance. Globalization has led to an in a Globalized emphasizing the role of collective
increasing competition between World. memory and cultural identity.
financial centers worldwide and
culture has become one determinant
of competitiveness.
17 Dan W. The purpose of this paper is to Independent Over The primary contribution to the literature
Hess, 2012 explore whether religiosity is a The Impact of 610,000 is the finding that religiosity is associated
factor associated with personal Religiosity on responses with personal financial decisions thus
financial behavior. Specifically, I Personal Financial to extending the extensive literature on the
examine whether religious social Decisions. interviews influence of religion on personal behavior
norms are associated with levels of Dependent conducted
credit card debt, credit scores, Personal financial through
foreclosures, and bankruptcies for behavior qualitative
individuals method
18 Meredith This paper will discuss how these Independent Evaluating All of these findings can assist auditors
Young cultural differences will impact the Cultural Influences surveys functioning in any culture to focus their
2013 international convergence of Dependent conducted procedures in the necessary direction
accounting standards soon to come Accounting and Its by based on the culture in which they
Practices psychologi practice
sts
19 Jesse Collects information about family Dependent Both This finding indicates that while most
Bricker, Lisa incomes, net worth, balance sheet Family Finances quantitative families continue to hold some type of
J. Dettling, components, credit use, and other Dependent and asset, many more families now hold
Alice financial outcomes. The beginning Evidence from the qualitative fewer different types of assets
Henriques,a of the 2010 and 2013 surveys. Survey of Consumer method
t el.2014 Finances through
questionnai
re and
interview.
20 Dennis N.W. The main purpose of this paper is to Family Planning in Qualitative The interpretation of the results, depend
Chao discuss the results of this study and Egypt Is a Sound method on how ―benefits‖ are defined and
2005 to compare them with results from Financial Investment. measured, resulting from a smaller
the original Egypt study and studies population size, the cost-benefit study is
from other countries. sometimes referred to as a ―public cost-
benefit analysis‖ or ―financial cost-
benefit analysis
21 Shuhana This paper discusses the role of the Dependent Mixed The findings revealed that, there is still no
Shamsuddin streets‘ activities in making Kuala Livability of Kuala method significant relationship between the
29
 , Nur Lumpur a livable city and the Lumpur City Centre: techniques lengths of stay of the resident in Kuala
Rasyiqah happiness level of the residents Independent is used Lumpur with the happiness level towards
Abu Hassan, towards the city‘s street activities An Evaluation of the quantitative the street activities that occurred in the
and Ahmad Happiness Level of as main city.
Bashri the Streets‘ Activities collected
Sulaiman data and
support by
2013
qualitative.
22 Thomas Describe the personal financial Dependent Quantitativ The result is that many seemingly
Stanley and planning Define the e data used wealthy people live from paycheck to
William Process. Engagement paycheck and will be unable to retire at
Danko • Identify and explain the steps of Objectives the standard of living they now enjoy.
the personal Plan Appropriate
Financial planning process. Engagement
• Describe the benefits to the CPA Procedures
of adding Develop a Basis for
PFP service to his or her existing Recommendations
practice Communicate
Recommendations
Implement Plan
Decisions
Monitor Progress
Independent
The process and
practice of personal
financial planning
23 Rosilyn H. The theories identified from the Independent Qualitative Finally, further research is needed into the
Overton, literature were compared with the Theories of the method behavioral and communication aspects of
financial planning educational financial planning financial planning, and analysis of
Ph.D.,
topics list of the CFP Board of Profession financial planning theory is an area in
CFP®, Standards Dependent which there are many opportunities for
RFC® and the core financial planning Comparison of further research
Assistant process was explored in detail Strategic Planning
Professor and Financial
Planning
2008
Processes

2.2. among grounded theories of this research

2.2.1Theory one
According to Thomas Stanley and William Danko establish empirically what many readers may
understood intuitively—that high net worth individuals devote a great deal of time to planning
their wealth accumulation. One of Stanley and Danko‘s Seven Factors for becoming wealthy, in
fact, is allocating time, energy, and money in ways conducive to effectively building wealth.
30
Among millionaires who built rather than inherited their wealth, the authors found that ―they
spend significantly more hours per month studying and planning their future investment
decisions, as well as managing their current investment, than high-income millionaires.‖.

2.2.2 Theory two

One of the among basic theories of this research is according to (Hugh crankshaw) which
identifies on the principles of practice management as applied to the personal financial planning
process. The purpose of this research is to establish principles that financial planners could use to
improve the services deliver to the individual. To do this meaningful research had two structured
phases. The first phase is theoretical study that provides the basis for the design of research
instrument. The second phase is an empirical study that will be on the responses received on the
research instrument to found principles of practice personal financial planning and family
financial investment.

2.2.3 Theory three

according to Rosilyn H. Overton, Ph.D., CFP®, RFC® Assistant Professor‖ The theories
identified from the literature were compared with the financial planning educational topics list of
the CFP Board of Standards and the core financial planning process was explored in detail A
definition of financial planning as values and goals-driven strategic management of the client‘s
financial resources was fashioned and the financial planning process as the strategic planning
process applied the financial and economic resources of the person or family was also defined‖

2.2.4 Theory four

How should financial planners be trained?
As a tool for training financial planners, the text starts strong. The sections on communication,
internal analysis, and helping clients establish financial direction are thorough and give the
proper emphasis on the planning process. The early and detailed discussion of mission, objective,
and goal setting provides an excellent framework for working through the specific planning areas
that make up most of the remaining chapters in the text.by Michael A. Dalton, James F. Dalton

2.2.5 Theory five

According to Shodhganga job sie, this theory refer to financial literacy that addresses the way in
which individuals or households mobilize, spend and save money after seriously considering
31
various factors involved in it. Components of personal finance include mobilizing money, saving
money in suitable avenues, spending for consumables and other assets, borrowing and investing
or asset building.

2.2.6 Theory six

According to UK's comprehensive investment guide to help the people whose are seeking for
investments, it is important to financially secure family members but the resources are usually
limited. Family investments offer various options to suit the customer's need. Choose the right
family investment option and avail higher return. Guidance from professionals enables you to
choose the right option. Ensure you start saving for your child from early stages to provide a
stable financial background. There are plenty of investment instruments to secure health and
finance thus securing the future needs of the family.

2.3 Personal financial planning in Malaysia

The economy in Malaysia has recorded an impressive growth rate over the past few decades.
There have been various initiatives from the government to increase the wealth of the nation and
its citizens. With the country now enjoying among the highest savings rate in the world, the
government is putting in tremendous efforts and Management in promoting and encouraging
mobilization of these savings by introducing new and innovative products in the already vibrant
capital market (Nik Mahmoud, 2006).

Having the specific capabilities of particular type in terms of practice personal financial planning
includes influential operation of reserves to obtain a cumulative amount of wealth, followed by
careful protection of such personal or family wealth against value decrease and losses.

2.3.1 Personal Finance

Money plays as essential role in the life of a person, either rich or poor. Money is an important
for personal well-being as well as the pleasant of each family. Some people believe money
brings happiness but I believe the knowledge and expert is more power than money so, in case
no one can refuse money could bring some enjoyable . Financial wellbeing dictates the quality of
life. So in this scenario personal finance function covers the following essential elements:
1) Planning procurement of money and making plans for future prediction

32
 2) Organizing is having source and use of money with a specific goal and preparation into
structural plan.

3) Controlling- having some checks and balances in using money. Personal finance is the
application of the principles of finance function to the monetary decisions of an
individual or family.
To addresses direct way in which individuals or family prepared, spend and save money after
seriously considering various factors involved in it.in the following are component of personal
finance

Component of personal finance

Mobilizing Saving Spending for

money in Borrowing Investing
money consumables
suitable

The keys to successful practice of personal financial planning and family financial investment
are good record keeping and the reliable implementation of your future plans.

Personal financial planning describes the long-standing profit planning aimed at generating
greater return on assets building, growth in market share, and able to foreseen the future
development of personal financial planning and solving financial difficulties is important to your
organization's long-term financial capability and perform successfully.

Basically, financial planning is about using your money wisely and moves in service of long-
range outcomes. Furthermore financial planner as: ―a qualified investment professional who
helps individuals and corporations meet their long-term financial objectives .to plan your current

33
financial capability is a very important to maintain a stable financial household. Good financial
planning and achieving financial stability will also help to prevent financial crisis. This study
will help you to create a budget in order to examine which household expenses could be reduced,
so that you can set goals to limit your spending (denyelle Baete Kenyon at. El 200

2.4Financial literacy
Definition of Financial Literacy General literacy refers to a person‘s ability to read and write
(Zarcadoolas, Pleasant, and Greer 2006). The standard definition of literacy developed by the
Literacy Definition Committee and used by the National Adult Literacy Survey is ―using printed
and written information to function in society, to achieve one‘s goals, and to develop one‘s
knowledge and potential‖ (Kirsch et al. 2001, p. 3). Application of knowledge

Definitions of financial literacy in United States (PACFL, 2008) Canada (Task Force on
Financial Literacy, 2010), United Kingdom (FSA, 2011), and Australia (Financial Literacy
Foundation, Australia, 2008), Signify the importance of application of financial knowledge in
financial literacy. Financial literacy can be Financial literacy can be
interpretedbroadly or narrowly. In a broader perspective, financial literacy can be statedas
―understanding of economics and how economic conditions and circumstances affect household
decisions‖(Worthington, 2006)

1. A narrow definition of financial literacy focuses on ―basic money Management tools such as
budgeting, saving, investing and insurance‖ (Natalie, Newton and Chrisann, 2010)
2. It is the narrow view of financial literacy that is particularly relevant to individual decisions
concerning financial matters
This research to examine the level of financial literacy to move at full aligned to knowledge
levels, for example after determining on financial products Almost every Malaysian claims to be
saving and recognize the need to save.

2.4.1Components of Financial Literacy

Financial literacy has three distinct but dependent components
 Core competency
 Proficiency, and
 Opportunity

34
A financially literate person must be capable in the core competencies, and be given
the opportunity and situation to acquire financial literacy and its benefits for the society‘s
financial capacity.

2.4.2 Core Competencies

Based on review of literature, a financially literate person should be proficient in the following
core competencies.

 Expressed mathematical skills/ability

 Budgeting plan, including the ability to keep track of expenses and income
 Saving
 Borrowing, and
 Investment

The core competencies are related to all sections of the society regardless of socio-economic or
regional basis and can be expanded, depending on the large size of expenditure, preserving,
borrowing and investing.

2.4.3 expressed Mathematical skills/Ability

Expressed mathematical skills/ability is basics understanding operation of money relates to the
financial knowledge needed for the most essential day to day calculations involving finance. The
numerical aptitude takes the form of basic calculations related with the cost of buying goods,
paying bills, interest and discount calculations etc. At the basic level it is adding, multiplication,
subtraction and division. Lack of mathematical abilities will surely affect financial literacy. At
developed level, it is the capability to comprehend financial statements or other accounting
information, time value of money, risk analysis etc.

2.4.4 Budgeting Planning

Budgeting is planning financial arrangements means keeping track of finances in right way and
reducing needless spending. Living within one‘s own means is a skill necessary for effective
budgeting, and budgeting is essential when there is limited income (MAS, 2005). The title of this
research would encourage individuals and household to have ability and skills to plan the present
and future financial situation, your need to find places wherever you can spend less and save
more in order to achieve your financial goals. In practicing your financial plan you need to
know the net income that appears on your paychecks.

35
You also need to know how often you get paid.as we know most of our bills are paid monthly,
so it‘s very important to know how much you get paid every month. For example my monthly
income is RM 1600; the saving and expenses are the following: rent RM400, groceries RM300,
trasportationrm100, saving RM 600, emergency fund RM 200 this is my personal financial plan.
I always try to avoid over expenses and put aside some money for future in order to live
comfortable life and every four months I go shopping for buying necessary among different
things.in this personal plan i consider as short time budgeting plan.

2.4.5 Saving
Savings relate to setting aside some money for future use.to have saving plan it‘s the most
powerful success regarding your financial capability, It may be short or long term saving. While
short term savings relate to budgeting, long term savings are applicable to building long time
financial plan, business investment, children education, retirement life, for purchase of costly
items required in life such as a house, a car or even for marriage expenses, family investment
plan, dream places for vacation –and how much it will cost and so on.

2.4.5.1Make Saving a Priority

Practice of personal saving plan you will be more likely to save money so you should give it a
priority to put aside ;there are so many type of saving option available in order to reach your
goal ,Sit down and figure out what you‘d like to plan, Then make your plan:

 Set a timeline for when you would like to end up your dream.
 Set a timetable by dividing the total goal amount by the number of weeks, months or pay
periods between now and your financial goal date.
 Be careful by dealing with in a certain way of your savings contribution just like any
other must-pay expense, such as rent or groceries.so you have to be observing the
forecasting of the future outcome.

2.4.6 Borrowing
In modern era, borrowing is a way of life for all categories of people. Many people take up loans
or mortgages. An indicator of competent borrowing is that loan amount should be relative to
earnings. Debt literacy determines proficient borrowing. The core competency of a financially
literate person is the ability to understand debt, and the processes involved to avoid it, reduce it
and repay it. It also relates to competence in using loans (Lusardi and Tufano, 2009) and
responses to debt including the ability to determine whether debt is justified (World Bank, 2008)
36
Debt illiteracy is therefore related with over- indebtedness, and an inability to reduce existing
levels of debt (Lusardi and Tufano , 2009).People with low financial literacy are more likely to
have problems with debt (Lusardi and Tufano, 2009)

2.4.7 Investing
Every person live in this world should need to have ability to invest in successful way and
choosing the most suitable investment portfolio is another key feature of financial literacy. The
fact of carefully choosing of an investment portfolio depends on the finance available for funding
and the purpose of investment. Investment may be in real assets or financial assets buying shares,
capital investment. In a simple way is to invest amount of money for today to return on better
profit for tomorrow. A Japanese survey suggests three criteria for choosing investments: safety,
liquidity and profitability (Hiroshi, 2002)

2.4.8 Proficiency.
All the five core competencies described above are essential for financial literacy, but these
competencies also require a degree of proficiency. Thus, financially literate person must be
proficient in the core competencies, having
proficient financial knowledge, ability, skills and experience in the core competencies supported
by positive attitudes about money.

2.4.9 Skill and confidence

A financially capable person possesses all the skills necessary to effectively manage finances to
achieve well-being, and this includes Communication skills, interpersonal skills, reading skills,
mathematical and computational skills etc. The definition of financial literacy adopted in the
United States by the Jump start coalition is ―the ability to use knowledge and skills to manage
financial resources effectively for a lifetime of financial well-being‖ The element of confidence
is added to the Canadian definition of financial literacy also together with skills.

Financial literacy means having the knowledge, skills and confidence to make responsible
financial decisions‖ (Sandra Huston, 2010) in his search should collect for a better definition to
financial literacy states: ―based upon a review of research studies since 2000, the many
conceptual definitions of financial literacy fall into five categories:

 Knowledge of financial concepts

37
  Ability to communicate about financial concepts,
 Aptitude in managing personal finances.
 Skill in making appropriate financial decisions and
 Confidence in planning effectively for future financial needs” (Remund, 2010)

Financial literacy therefore requires communication skills also. It includes the ability to
apply knowledge and to communicate that knowledge, making financial literacy vital to effective
decision making.

2.4.10 Opportunity to Acquire and Use Competency and Proficiency

It is important that a financially literate person should have the opportunity to acquire skills, and
use them. Participation in economic life should
maximise life chances and enables people to lead fulfilling lives and this requires knowledge and
competence, ability to apply that knowledge and
opportunity and environment to act (Elizabeth and Margaret, 2007)

The module of chance pressures the social feature of financial literacy, which necessitates the
rightful delivery of community properties that allows individuals to contribute in the financial
markets. This research can be referred to as the financial comprehensiveness of a specific
Malaysian society. In Kuala Lumpur there are economically capable people who have the
knowledge, skills and confidence to be aware of financial opportunities, to know where to go for
help, to make informed choices, and to take effective action to improve his/ her financial well-
being while an enabling environment for financial capability building would promote the
acquisition of those skills. An ‗enabling environment ‗refers to an infrastructure, business model
and regulatory system which promotes and allows participation, excluding no particular groups
or people from the financial market.

2.4.11 Measuring Financial Literacy

Several fundamental concepts lie at the root of saving and investment decisions as modeled in
the life cycle setting described in the previous section. Three such concepts are:

 Numeracy and capacity to do calculations related to interest rates, such as compound

interest.
 Understanding of inflation; and
38
  Understanding of risk diversification

2.5 Knowledge of personal financial planning

Financial knowledge is defined as understanding of key financial terms and Concepts needed to
function daily in the society‟ (Bowen (2003)).In recent years, financial knowledge has gained
the attention of a wide range of major banking companies, government agencies, grass-roots
consumer, community interest groups, and other organizations (Braunstein& Welch, 2002). In
knowledge financial planner people interested groups, including financial plan makers the main
business companies, banks ,corporations whose are consecutively improve and succeed to apply
their financial knowledge in to their practical and effective way to make decisions which most
advantageous to their economic and financial well-being.
The researcher conducted a survey to understand the knowledge of personal financial planning
that influence family financial investment those are live in Kuala Lumpur in terms of their
financial knowledge, attitudes, behaviors and their abilities to manage finances effectively. The
survey measured the relationship between independent and dependent variables.
The need for financial knowledge has never been greater (Atkinson et ai, 2007). They argued
that changes in the role played by the state have shifted responsibility to individuals who now
need to ensure that they have adequate resources for their old age, and to provide financial
security during times when they may be unable to work through unemployment, sickness or
disability. At the same time, increasing complexity of financial services provision has made it
more difficult for the average consumer to be sure they have made appropriate provision.

We learned from this research the body of Knowledge classifies is a financial planning expert
individuals whose able to draw on to distribute financial planning to customers or when
interacting with other in a professional capacity. Financial knowledge inspires personal and
family financial planner‘s sound money managing practices.

The problem of financial burden among youths is quite serious. They suffer from financial
difficulties such as high incidence of bankruptcies, credit problems, poor savings rates, and
impulse buying. In Malaysia, statistics in 2005 show that eight percent of the 16,000 cases of
bankruptcy are involved those under age 30 (The Star, 25 Oct. 2007)

39
2.6 strategic investments planning
Business investment strategies are generally based on a long run period. a well-planned
investment strategy on family finance is essential before taking any investment decisions. The
development of business investment strategy largely depends upon the factors such as long-term
goals and risk on the investment.
I believe that the best leverage tools to achieve financial freedom are financial education. Hence,
I aspire to empower youth individuals to learn with their humble value investing knowledge.
There is always obstacles and constraints face every investor although, the return on investment
is not always clears, so the investors prepare an investment strategy as to face the ongoing
challenges in investment. A stable investment strategy is usually required in the process of
investment, which owns long time period and some risk tolerance. When an investment strategy
is aggressive, the chance of attaining a bigger goal is higher. An efficient investment strategy can
be obtained from the portfolio theory, which shows good estimates on risks and returns.

In this study I need to know if an investment strategic planning is among factors that contribute
towards family financial investment. Investment strategy is focused on a risk-return trade off for
a probable shareholder. Great profit investment instruments such as real estate and mutual funds
usually have more risks associated with it than low return-low risk investment opportunities.in
mutual fund is a service of expert in a financial knowledge with skill to generate the money with
many different companies The return on investment can be calculated on past or current
investments or on the estimated return on future investments.

Why invest in Malaysia

Malaysia is a multi-ethnic, multicultural and multilingual society, strategically located in the
heart of South East Asia with easy access to all of its neighbors, offers a cost-competitive
location for investors intending to set up offshore operations for regional and international
markets.

Malaysia is in its most radical transformation as it battles to achieve the Vision 2020. As one of
the five founding members of the Association of South East Asian Nations (―ASEAN‖), a geo-
political and economic organization whose aims include accelerating economic growth, social
progress and cultural development among its members, the country is a strong supporter of the
ASEAN Free Trade Area and the ASEAN Investment Area.

40
According to the researcher, and information collected during my study I recommend to all
future investors around the world, Malaysia is among the best countries to invest your capital in
terms of their economic security, political constant, well developed country, open and
welcoming to the international investors.

Malaysia‗s political and economic stability with a well-developed legal system, prudent and
pragmatic investor friendly business policies, cost-productive workforce, developed
infrastructure comparable to that of any western country and a host of other amenities makes this
country an enticing place for investors. Other points for foreign investors to consider when
looking at Malaysia as a potential place for investment include various forms of business set up
(e.g. Representative office, branch office, companies etc.), tax-free zones, growth corridors and
Labuan International Business and Financial Centre. 10 Malaysia today is one of the world‘s top
locations for offshore manufacturing and service based operations. Multinational corporations
from more than 40 countries have invested in over 5,000 companies in Malaysia‘s manufacturing
and related services sectors. Many of them have also expanded and diversified their operations in
the country, reflecting their confidence in Malaysia as a site for their business ventures.

 2.6.0 the most popular Investment Design is distributed into four distinct
categories:

 Risk and return on investment goals

 Investment rules and constraints

 Investment strategy

 Portfolio observing, reevaluation, and rebalancing.

Financial investor must be able to predict and analyze what kind of risk and return on
investment of your strategic investment plan should face during operational of investment
process. This research concentrate on strategic investment plan have a positive connection
between the family financial investments.

2.6.1 Predictable returns

You must not invest without specific aims in mind. For your early goal, you ought to choose
what revisit you anticipate your finished portfolio to make above a specific period. You cannot
41
understand alongside certainty what the actual returns will be beforehand you invest. Though,
you can guesstimate an anticipated return, or an aim you desire to accomplish across an exact a
period of time (such as a week, a month, or a year). Know that your predicted return on
investment will have a main encounter on what your portfolio looks like.

2.6.2 Predictable risk

As a higher anticipated return on investment needs you to accord more risk, in strategic
investment plan it is vital that you understand your risk-tolerance level, or your willingness to
take risk. Whereas you are in your existence, as embodied by your age, will probably have a
great effect on how much risk you are keen to take. Overall, when people are younger, they are
more agreeable to take risk because their investment strategic plan will have more periods to
produce, to control and overcome losses. As older people, they normally come to be less taken to
consensus risk because they will demand their investment funds sooner for retirement and
supplementary intentions.

2.6.3 Investment constraints

After you have selected on your investment rules, you ought to recognize your investment
constraints, constraining factors that you have to take into report as you accomplish your
portfolio. Your strategic Investment planning should address a number of important constraints:
liquidity, investment skyline, tax considerations, and each distinct need

Value investing is one investment strategy that has worked well above time. In easy speech, you
buy shares after they are inexpensive and then you vend the shares after they come to be high
prices.

Other accepted investment strategies include concentrating on a particular sector of the

marketplace that you understand well. When you are starting investment, the personal investor or
family fund should believe that by analyzing an area in depth you'll gain a frontier above
supplementary financiers in the market. Here, you recognize a sector that you contemplate will
benefit from a main trend and next select the best companies inside that sector.

Finding an investment strategy for the family financial investment it works best for probable to
involve a slight examinations and errors. The globe of investment has its styles, so from period to
period a slight investment strategies work larger than the others. Indeed, afterward the stock
marketplace is rising; most investment strategies will do well. This is why it's a good trusted to

42
benchmark your presentation opposite the finished market. This method you can discern if all
your manipulation was worthwhile and assistance you, make sure you don't attribute your
investment accomplishment to merely luck.

2.6.4 Business structures

Foreign investors wishing to set up their business in Malaysia can choose from a variety of
business structures. A description of the key business structures is set out below. It should be
noted that private limited companies are the most popular form of vehicle for doing business in
Malaysia. All companies, partnerships and sole proprietors intending to do business in Malaysia
are required to register with the Companies Commission of Malaysia (―CCM‖) which is
responsible for the administration of the Registration of Businesses Act and the Companies Act.

2.6.5 Types of Investment Strategies

a passive investment strategy is attempted to minimize transaction costs while an active
investment strategy is used to maximize returns based on moves such as proper market timing.
This normally means, buying any business investment or assets when they are cheap and selling
them off when their prices going up.

Both these type of investment strategies are valuable, the passive, is kind of trying to reduce the
operational costs of business activities while an active is to be very smart and keep watching
when the business life cycle is going down you need to catch opportunity to purchase the
properties or resource when values is going up is the time to marketing and selling back.
Investment strategy, however, is not very beneficial for small time investors. Small time
investors can adopt the buy and hold investment strategy to invest in equities, which although
volatile in nature, give favorable long run returns.
The strategy of value capitalizing, a typical investment strategy spread by Benjamin Graham
focuses on the approach that financier purchase stocks of a company as if he/she was buying off
the whole company without paying any attention to the stock market scenario or any exterior
conditions such as the political climate. By the end of the day, if he/she can buy the stock at less
than that its actual future worth to the buyer, the person is said to have discovered a "value
investment.‖ You need to know the consequences of what coming out when you buy entire
company or part without consider the value of your future wealth to the purchaser. This study
will help, guide and provide you a lot of knowledge about your personal finance, family financial

43
investment as well as investment strategies.
2.6.6 Which investment strategy should you choose?

There is no one investment strategy that suits everyone. A good investment strategy is the one
that works for you by frolicking to your strengths and removing your weaknesses. For e.g. If
you're good alongside numbers next an investment strategy that focuses on methodical analysis
of firm reports could suit you. A good investment strategy ought to additionally be easy to
pursue, easy to summarize and notify you after to buy and after to sell; of course it should to be
established on sound investment logic. As personal investor or family investors you have to
carful and keep observing what kind of investment you‘re going to do.

The most significant financial-planning document you will design, as well your catalog of
confidential and household goals, is your Investment Plan. In finance words, your strategic
Investment design is additionally recognized as your investment strategy statement. An
Investment plan is vital because it creates a framework for every single investment attention in
that you will join. This thesis will help you to understand when you are going to do strategic
investment planning ,you should ask yourself; what you will invest in, how you will invest, why
you will invest, and what percentage of your money you will invest, and so on. In short, your
strategic Investment plan considerably affects your investment returns. Comprise this plan well
and then pursue it carefully.

2.7 culture influence on personal financial planning

Culture have strong influence on personal financial planning because every individuals or
families have background traditional culture that has affect in their life journey. Let us take
example for the author of this research; I believe culture have play important role in personal
finance. The fundamental of each individual is the family‘s background and life he/she grew up
some families encourage you, to train your economically grow from childhood age to teach you
saving and spending wisely without wasting money.

A lot of Islamic countries believe and inspires you to have future plan in terms of your financial
position, Some people personally have talented skills of economy to divide their income into
three categories; part one expenses, part two for charity and final part to save by growing in
investment and definitely this is, what is Islam teach me. If you have wealth or income no matter
how much is Islam order you to give some of your money to the needy people so that this culture
44
have big influence on personal financial planning. Understanding Cultural Influences on personal
financial planning contains tools for you to use to help learners identify the underlying values
that motivate them to make sound financial life decisions. You will soon see that by approaching
finances through individual and social values, you can put the ―personal‖ back into ―finance.‖
This can be of great help in improving the sense of helplessness and/or anxiety often associated
with money matters—especially during periods of adversity

It also eases the way for the discussions and discoveries that will help learners make better
choices. Finally, it can give you more confidence that you are getting learners to the root of their
habits, a necessary place for anyone facing the need for long-lasting change. The objective is for
you to use the simple exercises at the back of this Guide to help them think more broadly about
complex money issues. The movements are based on research across disciplines as diverse as
behavioral finance, the social sciences, and even the physical sciences, on why and how we all
make financial decisions that either enhance or sabotage our present and future financial well-
being.

Culture is an extremely colossal word, seizing into report our cultural backgrounds, spiritual
associations, childhood areas, caregiver relations, educational opportunities, relations traditions,
explaining the early story of a group of people or sharing mutual events and facts and legends
and much more .Personal, historical, and socio-cultural aspects of a commercial situation that
impact an individual or family‘s attitudes and deeds, encompassing purpose and setting goals,
decision making, and judgment concerning the cultural influence and what to trust or how to
deed.

2.7.1Multicultural Society

Malaysia‘s rich and varied social and geographical history mean that its culture has been
influenced by a wide range of individual beliefs. It is a multi-racial country which is leading the
way in terms of social integration and mutual cultural awareness and respect. There are three
principle races in Malaysia. Firstly there are the Malays, who are traditionally Muslims and who
make up the largest sector of the Malaysian population. The next racial group is formed by the
Chinese people living in Malaysia, the majority of who are Buddhists; and finally there is the
Indian sector of the population who are mostly Hindus. But in addition to these main racial
groups, there are also a large number of Sikhs and Christians who live and practice in Malaysia.

45
In this research I focus on cultural influence on personal financial planning for these
multicultural people who have different culture and religious; the Islamic sharia law prohibited
the interest and allows people many different ways of doing profit better than interest ( Islamic
sukuk,musharakah,mudarabah,murabaha) also this study conduct and how their cultural
influence on personal financial planning impact and contribute with family financial investment,
for community cultural values an whether these values affect the personal financial choices of
the people who live in the community.

2.7.2 Respect for all

Although Malaysia is officially a Muslim country, all three of the above religions are extremely
important across the whole country. The Constitution of Malaysia lays down the right of each
religion to practice freely in an atmosphere of acceptance and tolerance. Respecting more than
one religion and cultural tradition has given Malaysia an incredibly rich culture. The different
races all have customs and traditions which give the country as a whole a very colorful heritage.

The finding result of analysis for these two variables (cultural influence on personal financial
planning and family financial investment) proves their positive significant relationship between
these two variables alongside a country‘s skill to benefit from global transactions, for at least
three reasons. First, to capture the benefits from global transactions, a state has to impose
entitlements so that global transactions partners are keen to go in into contracts alongside firms
or people in the country.

Second, as a state takes advantage of the benefits of transactions, it becomes more subject to
external influences that dilute the effect of its culture.

Third, a state that engages in global transactions becomes more open to external competition. As
we know Malaysia is multicultural that lead internal firms to advocate changing institutions that
prevent them from being more competitive. Malaysia is among top countries that have rich
culture which international investment companies have great influence to create a lot
opportunities in this development country.so Malaysian culture have positive connection on
personal financial planning and family financial investment.

46
2.7.3 Why culture can matter for finance
Culture can alter finance across at least two channels. First, the benefits that are major in a state
depend on its culture. For example, charging interest can be a sin in one faith but not in another.
Second, sophistication affects institutions. For instance, the legal system is influenced by cultural
values. Culture plays an important role in this environment. Although, in the literature, there are
many concepts of culture there is widespread agreement that culture is something which is
learned and acquired in social life. Different groups are guided by different "world-views", 10
priorities, belief systems and ways of making sense of the world (Crang 1998). On a more
profane level, culture is often compared with computer software needed for programming a
given biological hardware with members of one human group differing from another in their
mental programs which make people see situations differently and have different approaches and
solutions to problems (Lane et al. 1997).

The act of financial culture in society is experiencing profound adjustments at the turn of the
century. This has several facets. One is the relation between culture and global finance in the
period of globalization. Commercial marketplace locations worldwide are working as nodes or
centers of economic control

Nowadays, there is an extensive feeling that in course of globalization both global finance and
culture have come to be extensively detached from spatial context. Nevertheless, both globes are
tautly anchored in central locations of commercial and traditional power that have come to be
recognized as globe cities. Those are locations that are of substantial commercial relevance due
to the money, operatives, commodities and data pondered there. Their impact is stretching distant
beyond their borders to locations and spans worldwide.

Finally: finding of this study analyzed that cultural influence on personal financial planning have
strong positive significant towards family financial investment. Culture begins inside and it is
tough, maybe impossible, for external laws to change the basic ethics and the behavior of the
society. Therefore, upcoming personal financial planners have to seize into thought cultural
influences in order to uphold the professional finance determination goals and developing society
into the future financial success.

47
2.8 Family financial Investments
Earning wealth is vital and grasping it has come to be extremely important. There are many
choices and way for investing and protecting the family financial investment in undue
conditions. With increase in inflation, these savings will go a long method in protecting the
upcoming. Family investments can be in the form of child trust funds, insurance, savings plan
and pensions.
2.8.1 The Need for Family Investments

 Private investment and establish family business grow

 Families should acquire to capitalize for their upcoming expenses.
 To elevated the amount of investment for the children education
 Family takaful insurance and treatment expenses
 Retirement financial plan

2.8.2 Types Of Family Investments

Fully understanding obtainable options can upkeep you find the best choice for you and your
family's future. Therefore, among options for making a family financial investment that could be
beneficial are the following:

 Establishing Investments business, government bonds, single family officer or mult-

family officer, bond fund, fixed deposits are low risk investment options.

 Investment linked insurance or takaful, condo investments, gold, property; mutual funds
are some moderate risk investments that offer higher returns on earnings.

 Equity investments like stock interchange are high-risk investment options that income
higher worth of returns.

48
2.8.3 Factors to Consider Before Making a Family Investment

 The period impact of the family investment in terms of the number of months and years.

 The accessibility opportunities in case your family demanded at short notice.

 Assess your comfort investment zone in taking on risk.

 If you are opting for a reasonable or high-risk relations investment, next report for
liability

 Make it clear picture of expectation for the family financial roadmap.

 Make sure there are no imprudent charges imposed.

 Keep on eye if investing deeply in shares of employer‘s stock or each individual stock.

All above factors considered before starting any investment although there is another factors but
as researcher will concise of these reasons. If you target to buy assurances - such as stocks,
bonds, or mutual funds - it's vital that you comprehend beforehand you invest that you might lose
a little or all of your money. This study will suggest before you make any personal or family
investment decision, sit down and take an effective action at your whole financial situation
particularly when you‘ve not ever made individual or family financial investment before.

One of the most essential methods to lessen the risk of investing is to differentiate your family
financial investments, logically this make sense‖ don't put all your eggs in one basket‖ so every
investor require to preferred the right groups of investment inside an asset group. Understand the
family investment options and commit your cash for certain duration so that any shortcomings
will straighten in due course. There are companies and organizations that can guide and offer
financial advice on structured investment, investment funds, and Retirement plans. Fair
Investment Advice Service and Family Funds offer expert advice from qualified advisors. They
provide details regarding the various family investment options and deliver a scheme that suits
your financial needs

2.8.4 Preparing for higher education Investment Plans

children education plan is one of most popular investment. You desire your children to have
49
 the best education probable, yet school and university expenses and fees can be costly. The
money you expend on your kids' education might be one of your family's biggest expenses.
Jump to the first train to save early will help your children have high-qualification
learning. The funds will be invested in a range of long-term shares for a profit at the end of the
plan.as long as you developing the children‘s education investment you need to save a certain
amount per month.

For children investment education needs to invest:

 Certain banks are extremely prepared to grasp family's investment capital for onset up
backing, seed angel investment or main period financing. These will proposal elevated
returns under the guidance of professional expert escorts.

 Invest regularly in stocks and shares for a higher return.

 Unit Trusts offer long-term capital growth by investing in stocks and shares of national
companies.

It is very important to economically protected family members but the resources are usually
limited. Family investments offer various options to suit the customer's need. Choose the right
family investment option and avail higher return. Guidance from professionals enables you to
choose the right option. Ensure you start saving for your child from early stages to provide a
stable financial background. There are sufficiently investment instruments to secure health and
finance thus securing the future needs of the family.

An alternative way of family investment could be being an angel investor. Companies such as
Venture Giant have a huge number of attractive business proposals lined up by entrepreneurs
looking for financing.

In an power to assistance you in discovering, understanding, and devising a confidential basis for
decision making, this research will guide to practice personal financial plan and family financial
investment and also this study presented to aid enhance your future financial capabilities of
various matters and provide a lot of the details of the financial world. The plan expresses a
framework to elucidate and construction your financial matters. This study is established on
confidential data you endowed considering your present resources and objectives. As clear
50
picture inside this this research can be a priceless assistance in the examination of your finances
because this research is a kind of rare, it does not embody the culmination of your planning
efforts. Practice of personal financial is an ongoing process

2.8.5 A Family financial roadmap:

Net worth of family financial plan
Dadir and Hawa sample
March 29, 2016
Asset
Savings and Investments $. $.
Stock mutual funds 30,000
Annuity income 10,000
Sukuk bonds 14,000
Children education fund 20,000 74,000
Retirement account
Retirement saving
Qualified plan Dadir 10,000
Sports-asset Dadir 30,000
HBSC asset hawa 22,000 62,000
Other Assets
Personal property 50,000
Auto 25,000 75,000
TOTAL ASSET 211,000
LIABILITIES
Credit card debt 2,000
Auto loans 10,000 12,000
TOTAL FAMILY NET WORTH 199,000

2.8.6 Family financial investment planning

You cannot invest without possessing the funds to invest, and you ought to not invest alongside
borrowed money. Whereas will you become the funds for your investments? In a preceding
serving, this research acknowledged the way of Budgeting personal finance and creating your
family financial investment. I suggested that you always wage the Noble first—that you wage
duties and supplementary offerings beforehand whatever else—and then pay yourself a
minimum of 10 percent, hopefully more (20 percent). Most personal financial practionners
51
counsel that you save a minimum of 10 percent when you are youthful, you have to set aside the
suggested 10–20 percent every single month, invest this money sensibly according to you in this
manual, I endorse to every individuals that you save 20 percent of every single dollar you receive
it. A good commercial road chart helps you understand your goals, your budget, and your chance
tolerance; it additionally helps you circumvent hazardous detours, such as get-rich-quick
schemes, that could stay or halt your progress. A good commercial road chart additionally helps
you choose whereas you desire to go in words of your confidential and relations aims and helps
you become there by helping you make astute choices considering investment and savings
programs. A good Investment Design is key to accomplished your commercial goals

Your investment strategy describes how you will invest your money. It clarifies how you will
manage, prioritize, and fund your investment; it additionally describes how you will assess new
investments.

A good practice of personal financial road map helps you understand your goals, your future
financial plan, and your risk tolerance; it additionally helps you circumvent hazardous detours,
such as get-rich-quick schemes, that could stay or halt your progress. A good personal financial
planner road map also helps you choose whereas you desire to go in terms of your confidential
and household objectives and helps you become there by helping you make smart choices
considering investment and savings programs. A good strategic Investment planning is key to
accomplish your future financial goals. Certain confidential targets cannot be accomplished
lacking encounter about specific financial goals, such as saving for the down payment on a house
or saving for a child‘s education. If you do not compute and design for the cost of countless of
your personal financial goals, it is probable that you will not be able to achieve them.

Begin saving at early time and periodically assess your progress in the direction of accomplished
your goal

52
 CHAPTER THREE

RESEARCH METHODOLOGY

53
 CHAPTER THREE

RESEARCH METHODOLOGY

3.0 Introductions
This chapter outlines the complete process of the research basically how the research will carried
out, how the data will collected and analyzed, and what were the techniques of data analysis and
discussion used. In order to achieve the objective of this study, questionnaires were distributed to
seven different locations of my target population focusing on internal residents in Kuala Lumpur
as to collect the accurate information practices of conducting in their financial planning and
investment. In this chapter furthermore, the systematic characteristics of the selected population,
sampling, types of research design, surveys, instrumentation and how it was dispersed were
discussed.

And also this chapter will cover including a description of the research model, Hypothesis,
Variable Measurement, data collection method followed by a describing sample selection which
involves in the questionnaire. Primary and secondary data, field works and technique of analysis
will be mentioned in this chapter. All in all, the aim of this study is to examine the factors that
influence the family financial investment. As well as to expression into the independent variable
that influences the dependent variable such as; practice of personal financial planning,
knowledge of personal financial planning, financial literacy, and strategic investment planning
and cultural influence on personal financial planning.

3.1 Research methodology

Starting point is the theoretical meaning of research methodology and research methodology
used in this thesis as follow: ―Research methodology is the study of research process itself -the
principles, procedures, and strategies for gathering information, analyzing it, and interpreting it-

54
(Gray, 2007, p14). In the social science context, research methodology is commonly classified
into two general formats, namely quantitative and qualitative research methodologies.
Quantitative research was driven by investigators with the need to quantify data. Since then
quantitative research has dominated the western cultural as the research method to create
meaning and new knowledge. What constitutes a quantitative research method involves a
numeric or statistical approach to research design. Leedy and Ormrod (2001) alleged that
quantitative research is specific in its surveying and experimentation, as it builds upon existing
theories. The methodology of a quantitative research maintains the assumption of an empiricist
paradigm (Creswell, 2003). The research itself is independent of the researcher. As a result, data
is used to objectively measure reality
Quantitative Research Methodology: ―Quantitative research methodology attempts to establish
formal relationships between related variables and it is mostly guided by positivist philosophy‖
(Asutay, 2008, p.7). Qualitative Research Methodology: ―Qualitative research is a holistic
approach that involves discovery. Qualitative research is also described as an unfolding model
that occurs in a natural setting that enables the researcher to develop a level of detail from high
involvement in the actual experiences‟‟( Creswell,1994).

Quantitative methods are usually functional when a researcher seeks to discover large-scale
outlines of deeds, as qualitative methods are frequently more competent after dealing alongside
contact and connections in detail.

A quantitative technique is a way for assessing goal theories by studying the association among
variables. These variables can be measured, normally on instruments, so that numbered data can
be analyzed employing statistical procedures. The final composed report has a set construction
including of outline, literature and theory, methods, finding analysis and discussion

3.2 The Importance of Quantitative method:

Quantitative investigation focuses on collecting numerical data and simplifying it across clusters
of people, Sampling bias is significant in ascertaining how generalizable the outcomes are
evaded Sampling variability reflects the numeral of assurance you can have concerning how well
the sample has been held the characteristics of the populace affected by sample size.
Why to use Quantitative methods?

55
According to (John D. Anderson, Superintendent of Schools) The Quantitative Research can be
used when options have been predetermined and a large number of respondents are involved. By
definition, measurement must be objective, quantitative, and statistically valid. Simply to be put,
it‘s about numbers and objective hard data. The sample size for a survey is computed by
statistician‘s type of formulas to ascertain how huge number of sample size will be demanded
from a given populace in order to accomplish findings alongside a satisfactory degree of
accuracy.

3.3 Research Design

This study is an investigative in nature where the purpose is to describe the relation between
practice of personal financial planning and family financial investment and examine dependent
and independent variables. Where the aims of this study concentrate the research problem,
objectives, research questions which mentioned in chapter one, and test theory of research
framework. The result analysis conduct will only be descriptive type. The research design was a
survey questionnaire. The self-administered survey instrument was composed of closed-ended
questions. Hence, quantitative data was collected with the use of the instrument. This researcher
chose to conduct self-administered surveys because as Spunt (1999) suggested, self-administered
surveys are more convenient and less expensive to administer, eliminates interviewer bias, gives
respondents privacy, and results can be analyzed more quickly.

3.4 Theoretical frame work

As the researcher mentioned above, Based on the literature review, this research concentrates on
theoretical framework in deeply through the independent and dependent in Kuala Lumpur at
particular places as I declared in chapter three. The framework emphasizes those variables
through the model design

56
3.4.0 Development model

DV
IV

H1. Practice of personal financial planning

Family
H2. Knowledge of personal financial planning
Financial

H3. Financial literacy Investment

H4. Strategic Investment planning

H5. Cultural influence on personal financial planning

The above development model was used in this research and the independent variables of this
study will consist of five variables that are practices of personal financial planning, knowledge of
personal financial planning, financial literacy, and strategic investment planning, cultural
influence on personal financial planning the last single dependent variable is family financial
investment.

3.5 Hypothesis
Hypothesis (H) is an unverified statement or possible solution to a problem. It suggests a
relationship between the dependent variable (DV) and independent variable (IV) and also shows
the direction of the relationship made based on the previous research. Hypotheses are predicted
in their relationship but after the findings the hypothesis will be tested to prove whether variables
are accepted or rejected. According to Literature Review, research development model of this
study can be designed into five hypotheses and they are described as following:

57
H1: practice of personal financial planning has a positive relationship to family financial
investment

H2: knowledge of personal financial planning has a positive relationship to family financial
investment

H3: financial literacy has positive relationship to family financial investment

H4: strategic investment planning has positive relationship to family financial investment

H5: cultural influence on personal financial planning has positive relationship to family financial
investment.

3.6 Field works

The quantitative research aims to invite 180 respondents from different stake holders with
different backgrounds. The researcher will focus on following participants:
1. Personal finance Practitioners.
2. Scholars/ Expertise.
3. Business sectors in Kuala Lumpur
4. Public those have a enough knowledge in the area.
The below table illustrates the respective participants profile.
Selection of Respondents –Basis –List and Background of the respondents

No Respondents Name of the Institution No. Of participants

1 Personal finance practionners LCF on Personal Finance 40

2 Scholars/expertise Lincoln Scholars 70

Malaya wales Scholars
3 Businesses companies and Klcc 30
investment Central market

4 Business sector Setapak city 40

58
By inviting them, the researcher is willing to receive in-depth answers which are inline the
objectives that has been formed by the researcher.

3.7. Variables and measurement

This research used the kind of Liker Scales which is defined as a psychometric response scale
primarily used in questionnaires to obtain participants preferences or degree of agreement with a
statement or set of statements. Liker scales are anon‐comparative scaling technique and are one-
dimensional (only measure a single trait) in nature.
Respondents are asked to indicate their level of agreement with a given statement by way of an
ordinal scale. Most common scale is seen as a 5‐pointscale ranging from ―Strongly Disagree‖ on
one end to ―Strongly Agree‖.
1=strongly disagree 2= Disagree 3= Neutral 4= Agree 5=strongly agree

The participants choose one of five levels of agreement. For example, 1-strongly disagree, 2-
disagree, 3-neither agrees nor disagree, 4-agree, and 5-strongly agree. The Liker scales are more
reliable and provide greater volume of data and it is easy and quick to construct

3.7.0 Demographic characteristics of the Respondents

This research will design to obtain demographic information of the respondent‘s data such as
gender, ethnic, age, educational background, employment status. Marital status.

3.7.1 Family Financial Investment

As you managing your family financial investment need to careful deliberation and guidance by
professionals to reduce the risk factor. As investor you need to do deeply research before you
invest any company, so there are trusted companies that you make the right choice of fairness
investment that might be exceedingly profitable. Families could be highly benefited from high
returns.

59
NO Items
A. I balanced growth, security and to keep pace with inflation.

B I understand completely how different investment products work; including

stocks and bonds and I follow financial markets closely
C My main interest is high, long-term returns and I am not concerned about
short-term decreases in the value of my investments
D I found the best investment for my family

E I prefer own family business investment

3.7.2 Practice of personal financial planning

Personal financial planning is the process by which an individual considers their
Current personal and financial information, determines future financial goals and
Develops a financial plan to meet these goals (Dawes, 1998.).
NO Items
A. To practice personal plan allow you to live confortable life.

B I have short and long-term financial plan

C I do understand how to practice personal plan

D I have financial plan in a current situation

E I practice finance as per planned schedule.

3.7.3 Knowledge of personal financial planning

In order to have the ability to act and be financially capable, people require knowledge and skills
to manage their personal finances. All other things equal, people who have greater knowledge
and understanding about finances and possess financial management skills are more likely to
make good financial decisions. As a nationally representative study finds, financial knowledge is
associated with positive financial practices (Hilgert et al., 2003).
60
NO Items
A. Everyone should have some aspects of knowledge to handle his/her financial
perspectives
B I should cover my goal-based personal awareness

C I have ability, skills to pursue my life journey

D Knowledge inspires persons to achieve his/her goals

E Financial knowledge increase personal well-being.

3.7.4 Financial literacy

Financial literacy speaks to the set of skills individuals need to make informed economic
decisions. Previous Research indicates that there is considerable deficiency in financial literacy
among students and adults in the United States. (Jumpstart Coalition, 2002) In recent years,
supporters of financial education, defined as knowledge that helps people make sound, informed
financial decisions (Hopley, 2003), has been reinforced by the findings of studies that show that
financial literacy training has had a positive impact on financial knowledge.
Financial literacy is a basic knowledge that people need in order to survive in a modern society‟
(Kim 2001).
NO Items
A. I keep records of everything, entering all revenues and expenditures

B I do assess the financial situation in my life

C I have to increase my living standards in the future

D I like saving rather than spending money

E I like to be independent and be able to make choices

61
3.7.5 Strategic investment planning
Your investment strategy describes how you will invest your money. It clarifies how you will
grasp, prioritize, and fund your investment; it additionally describes how you will assess new
investments.

NO Items
A. My main objective for this investment account is to Preserve Capital

B I planned long- term investment goals while covering risk of life

C I should not to invest without specific aims in mind

D I have to buy shares when they are low-cost

E I have more time to invest, to plan and overcome losses

3.7.6 Cultural influence on personal financial planning

The cultural influences on personal financial are so pervasive that it is significant for financial
educators to focus less on the observed shortcomings of people and more on the context of their
traditional and sociality in nature.

NO Items
A. People‘s values are influenced by their culture

B Culturally I like to eat outside rather than to cook at home

C I believe that the culture in my country encourage having financial plan.

D Religious believes influence every society‘s finance

E I believe Culture has a big influence on how individuals utilize resources.

62
3.8 Data Collection Method
The data will be collect from Personal finance Practitioners, Scholars/ Expertise, Kuala Lumpur
city center, central market, setapak city and other publics who actively run the area of personal
finance and publicly those have enough knowledge in the area. The methods of data collection
emphasized on the following:

The questionnaires will be delivered to the respondents directly and collected when respondents
finish answering all the questions given. Type of the data collecting used is primary data.

3.8.1 Primary Data

Primary data can be defined as data originated by the researcher for specific purpose of
addressing the factors that influence family financial investment, research problems, and
research objectives. In this study, the primary data will collect through research survey by using
questionnaire. The researcher chooses to use the questionnaire together relevant information to
surface some initial issues to formulate the relevant data in further depth investigation. So
through this method, the researcher can adapt the questions as necessary to clarify doubts and
ensure that the responses are properly understood by repeating or rephrasing the questions.

3.8.2Secondary data
Secondary data is the data that have been already collected by someone else and readily available
from other sources is also used to gain initial insight into the research problem as well as
objectives. As researcher I will use External secondary data is obtained from outside sources.
Secondary data is classified in term as of its source either internal or external. Internal, is
secondary information acquired within the organization where research is being carried out. In
this research will use both primary and secondary data in order to get accurately result and
reliable information.

3.9 Sample profile

In this research, the most respondents are local Malaysian, like Malay, Chinese, and Indian, the
survey area of target population are Kuala Lumpur city Centre, central market, personal finance
practitioners, Lincoln and malay-walas scholars or expertise, setapak city and business sectors
,the number of population supposes to be 180 respondents.

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3.9.1 Sample Size
A sample size of total respondents will be 123 set of questionnaires will randomly distributing
and the samples for this study will selecting from the data obtained through a survey
questionnaire which will conducting in the area was mentioned above.

3.9.2 Sampling Technique

According to Uma Sekaran (2003), this research was selected through random sampling
technique all elements in the populations are considered and each element has an equal chance of
being chosen as the subject of sampling design so, when the generalize ability of the finding to
the whole population is the main objective of the study. Sample is a true representative of the
population it belongs and sampling is the process of selecting sample. Since the research
population under study in different background respondents. The sampling technique is based on
the residents in Kuala Lumpur, case study will specific target area from collecting data sampling.

3.10 The pilot study

A pilot survey will conducted to actual survey, to ensure that the questionnaire contained no
errors and to confirm that the questionnaire captured the information required by the researcher.
The purpose of the pilot test is to ensure the clarity of questionnaire statement to respondents and
also to detect other possible weaknesses in the questionnaire

3.11 Data Analysis

Data collecting from the questionnaire will be processing by using SPSS, after collecting the
feedback of the respondents will analyzing by using the above software, the research method is
quantitative methodology. Descriptive statistics will use to explore the data collecting to
summarize and describe those data. Statistical provide the mean and standard deviation scores of
independent and dependent variables in this study. Finally findings, conclusion and
recommendations for future research.

3.12 Descriptive Statistics

Descriptive statistics were used to examine the means and standard deviations of the main
variables of the present study, i.e. Practice of personal financial planning, financial literacy,
knowledge of personal financial planning, strategic investment planning, cultural influence on
personal financial planning and family financial investment in Kuala lumpur. Also, frequency
analysis and cross tabulation were used for the demographic factors or any items that were
64
measured on nominal scale such such as: age, gender, ethnic, education level, professional or
employment status, income and marital status as age, education, and gender.

65
CHAPTER FOUR

DATA ANALYSIS

66
 Chapter four

Data analysis

4.0 introduction
In this chapter, SPSS is used to analyze the result for the study, to present the results and data
from the research. This chapter also covers the frequency analysis to analyze the demographic of
the research, moreover, descriptive statistics are also used to measure the mean and standard
deviation and Reliability analysis to evaluate whether the value obtained in this research can be
trusted or not. This presentation will proceed with an analysis to determine the demographic
profile of respondents and the respondents‘ background. Furthermore, Pearson Product Moment
Correlation Analysis to identify the relationship between two variables, and also multiple
regression analysis was carried out to explain the relationship between the independent variables
and the dependent variables. Lastly, test the hypothesis was conducted to determine the
relationship between the dependent variables within independent variables.

This chapter was discussed at the following

 Frequency analysis (demographic)

 Reliability analysis

 Descriptive statistics for the main variables of the study

 Correlation analysis

 Multiple regression analysis

 Hypotheses test related to the theoretical framework

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4.1 frequencies analysis
4.1.1 Gender
Gender Frequency Percentage %
Male 69 56.8
Female 53 43.4
Total 122 100.0

Table 1: Gender

Table 1 shows the number of respondents by gender for this study. Based on the findings, it
appears that more male responds than female .Male respondents consist of 69 (56.8%), while
female 53(43.4%) respondents.

4.1.2 Respondent Ethnic

Ethnic Frequency Percentage %
Malay 51 41.8
Chinese 29 23.8
India 16 13.1
Others 26 21.3
Total 122 100.0

Table 2: Ethnic
Table 2 shows the number respondents by ethnic for this study. Based on the findings, it appears
that more Malay respondent‘s than Chinese, Indian and others. Malay respondents consist 0f
51(41.8%), while 29 (23.8%) of Chinese respondents, Indian contain 16 (12%) and others consist
of 26 (21.3%) of respondents

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4.1.3 Respondent Age
Respondent Age Frequency Percentage %
20 and below 7 5.7
21-30 81 66.4
31-40 20 16.4
41 years and above 14 11.5
Total 122 100.0

Table 3: Age
Table 3 shows the distribution of respondents by age. The greatest number of respondents aged
21-30years accounted for 66.4% of the total surveyed. The second highest distribution of the age
of 31-41years and above represent 16.4% and the lower distribution of respondents‘ age 41 and
above 12% and the lowest distribution of respondents ‗age 20year and below represent 5.7% for
age categories.

4.1.4 Respondent education

Employment state Frequency Percentage %
SPM 5 4.1
STPM 3 2.5
Diploma 15 12.3

Degree 51 41.8
Master/phd 45 36.9
Others 3 2.5
Total 122 100.0

Table 4 EDUCATION LEVEL

Table 4 shows the number of respondents according to their level of education. Based on this
thesis, it appears that the most respondents have degree level of education 41.8% while the
second highest respondents have MASTER/PHD level of education 36.9%. The third level For

69
those who have DIPLOMA level of education represent 12.3% while SPM represent 4.1% and
STPM and OTHERS represents 2.5% respondents which are the lowest percentage of education
level.

4.1.5 Employment state

Employment state Frequency Percentage %
Employed for wages 74 60.7
Self-employed 34 28.7
Un-employed 12 9.8
Total 122 100.0

Table5: Employment Status

Table 5 shows the number of respondents according to their employment. Based on this research,
it appears that the most respondents are employed for wages 60.7% while the second highest
respondents are Self-employed 28.7%; the lowest respondents are un-employed 9.8%.

4.1.6 Marriage status

Marriage status Frequency Percentage %
Single 52 42.6
Married 69 56.6
Total 122 100.0

Table6: Martial Status

Table 6 shows the number of respondents according to their marital status. Based on this
research, it appears that most of respondents are married that represent 56.6% of respondents,
while those who are single represent 42.6%.

4.1.7 Income per month

Income per month Frequency Percentage %
RM 1000-RM 1999 30 24.6
RM 2000-RM 2999 55 45.1
RM 3000-RM 4000 28 23.0

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RM 4000-9999 8 6.6
Total 122 100.0

Table 7: Income per Month

Table 8 shows the percentage of monthly income of respondents. The research shows that the
most monthly income of respondents is RM2000-2999 which is 45.1% (55respondents), second
is RM1000-1999 which is % (24.6 respondents), third is RM 2000-RM2999 which is 23% (28
respondents). And lastly is RM4000-RM9999 which is 6.6% (7 respondents).

4.2 Reliability analysis

Reliability Analysis This measures the overall consistency of the items that are used to define a
scale. As a result, we are given sample size; number of items and reliability coefficients.so that
alpha is the most popular. Reliability analysis is used to determine the internal consistency of the
scale for the practice of personal financial planning, using Cronbach„s alpha. Sekeran (2003) that
Is the coefficient of reliability is less than 0.60 it should be considered as poor. Those in the
range of 0.70 are considered acceptable and those over the range of 0.80 are considered as good.

The dependent variable, family financial investment, was measured using the five-item
Questionnaire. All items were rated on a five-point scale, ranging from strongly disagree (1) to
strongly agree (5). This scale has been found to have a strong reliability coefficient, with a
Cronbach‟s alpha of (.647).
The independent variable, practice of personal financial planning, was measured using the five
item questions. The analysis for this study used Cronbach‟s alpha to estimate the internal
consistency of practice of personal financial planning scale, and the alpha was (0.524) that
means it has an rejected alpha value which is less than .60.in this case consider as poor.
The independent variable, knowledge of personal financial planning, according to the below
table was measured using the five item question. This study also used Cronbach‟s alpha to
estimate the internal consistency of knowledge of personal financial planning scale, and the
alpha was (0.712) that means this has strong an acceptable alpha value.
The independent variable, financial literacy, according to the below table was measured using
the five item questions .The researcher for this study also used Cronbach‟s alpha to estimate the

71
internal consistency of financial literacy scale, and the alpha was 0.718 that means this scale
have a high acceptable reliability coefficient.
The independent variable, strategic investment planning, according to the below table was
measured using the five item questions. The researcher for this study used Cronbach‟s alpha to
estimate the internal consistency of strategic investment planning scale, and the alpha was 0.697
that means this scale have acceptable reliability coefficient..

The last independent variable is, cultural influence on personal financial planning, according to
the below table was measured using the five item questions which are each five items developed
by the researcher and approved by the supervisor (2016). This research used Cronbach‟s alpha to
estimate the internal consistency of cultural influence on personal financial planning scale, and
the alpha was 0.709 that means this scale have acceptable reliability coefficient.

Table 8 reliability analysis

Independent Variables No of item Item Alpha

deleted
Practice of personal financial planning 5 - 0.524
Knowledge of personal financial planning 5 - 0.712
Financial literacy 5 - 0.718
Strategic investment planning 5 - 0.697
Cultural influence on personal financial 5 - 0.709
planning
Dependent variable
Family financial investment 5 - 0.647

4.3 Descriptive statistics

Descriptive statistics was used to explore the data collected, to summarize and describe those
data. Table below is provided the mean and standard deviation scores of independent and
dependent variables in this study. As showed in table below the average mean of family financial
investment 3.6984 with standard deviation of 0.68285 the practice of personal financial planning
response shows a mean of 3.7770 with standard deviation of 0.60148. With regard knowledge of

72
personal financial planning, the mean scores are 3.9164 and the standard deviations 0.65446,
regarding to financial literacy, table below shows respondent agreed with mean of 3.8525with
standard deviation of 0.67091.the average mean of strategic investment planning 3.7098 with
standard deviation of 0.71442 Furthermore cultural influences on personal financial planning the
mean scores are 3.5525 and standard deviations 0.77270.

Table 9 descriptive statistics

Factor Dependent Variable Mean Standard Deviation
Family financial investment 3.6984 .68285
Factors Independent variables
Practice of personal financial planning 3.7770 .60148
Knowledge of personal financial planning 3.9164 .65446
Financial literacy 3.8525 .67091
Strategic investment planning 3.7098 .71402
Cultural influence on personal financial planning 3.5525 .77270

4.4 THE HYPOTHESIS TEST

4.4.1 Correlation
Pearson product moment correlation analysis (Pearson‘s) was used to categorize the correlation
between the independent variable and dependent variable. The scale suggested by Seville et al
(1992, in frazil 2003). And was used to describe the significant relationship between the
dependent variable and independent variables of this research as table 4.10 the analysis focused
deep into the relationship between family financial investment with particular measurement,
Which is practice of personal financial planning, knowledge of personal financial planning,
financial literacy, and strategic investment planning and cultural influence on personal financial
planning?

Tale 10 Pearson’s indices of correlation

Pearson Indication
Between0.80-to 1.00= High correlation

Between 0.60 to 0.79 = Moderately high correlation

Between .40 to 0.59 = Moderate correlation

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Between 0.20 to 0.39 = Low correlation

Between 0.10 to 0.19 = Negligible correlation

Hypothesis one (H1) of the study was to determine whether a positive relationship exists
between practice of personal financial planning and family financial investment .The researcher
used Pearson Product Moment correlation coefficient and the result was shown in table below
there is signification of negative relationship between practice of personal financial planning to
subscribe family financial investment with a significant value of 0.00. Hence practice of personal
financial planning to subscribe family financial investment is related with a moderate correlation
(0.524).
Hypothesis two (H2) of the study was to determine whether a positive relationship exists
between knowledge of personal financial planning to subscribe family financial investment. The
researcher used Pearson Product Moment correlation coefficient and the result was shown in
table below there is signification of positive relationship between knowledge of personal
financial planning to subscribe family financial investment with a significant value of 0.00.

Therefore, knowledge of personal financial planning to subscribe family financial investment are
related with a high moderately correlation (0.712).
Hypothesis three (H3) of the study was to determine whether a positive relationship exists
between financial literacy to subscribe family financial investment. The researcher used Pearson
Product Moment correlation coefficient and the result was shown in table below there is
signification of positive relationship between financial literacy to subscribe family financial
investment with a significant value of 0.00. Hence financial literacy to subscribe family financial
investment are related with moderately high correlation (0.718).
Hypothesis four (H4) of the study was to determine whether a negative relationship exists
between strategic investment planning to subscribe family financial investment. The researcher
Used Pearson Product Moment correlation coefficient and the result was shown in table below
there is signification of positive relationship between strategic investments planning to subscribe
family financial investment with a significant value of 0.00 hence strategic investment planning
to subscribe family financial investment are related with moderately high correlation (0.697

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Last but not least Hypothesis five (H5) of this research was to determine whether a negative
relationship exists between cultural influence on personal financial planning to subscribe family
financial investment. The researcher used Pearson Product Moment correlation coefficient and
the result was shown in table below there is signification of positive relationship between
cultural influence on personal financial planning investments planning to subscribe family
financial investment with a significant value of 0.00 hence cultural influence on personal
financial planning to subscribe family financial investment are related with moderately high
correlation (0.709)

Table 11 correlation
PPFP KNPFP FL SIP CIPFP FFI
PPFP Pearson 1
Correlation
Sig. (2-tailed) 122
N
KNPFP Pearson 1
**
Correlation .613
Sig. (2-tailed) .000 122
122
N
FL Pearson .621** 1
.622**
Correlation .000
.000
Sig. (2-tailed) 122 122 122
N
SIP Pearson .444** .534** 1
Correlation .000 .000
.352**
Sig. (2-tailed) .000 122 122 122
N 122
CIPFP Pearson .352** .382** .336** .583** 1
Correlation .000 .000 .000 .000
Sig. (2-tailed) 122 122 122 122 122
N
FFI Pearson .431** .530** .585** .510** .520** 1
Correlation .000 .000 .000 .000 .000
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 Sig. (2-tailed) 122 122 122 122 122 122
N
**. Correlation is significant at the 0.01 level (2-tailed).

4.5. Multiple regression analysis

The following tables summarize the model summary, ANOVA table, and coefficient table to
investigate the relationship between the dependent and independent variables and to express
whether the research is strong or weak study:

4.5.1. Model summary

Model Summary Clarifies the ability of practice of personal financial planning, knowledge of
personal financial planning, financial literacy, strategic investment planning and cultural
influence on personal financial planning have influence on family financial investment. Based on
table below model firstly, the R square equal to .695(69.5%which means the variation in a
practice of personal financial planning, knowledge of personal financial planning, financial
literacy, strategic investment planning and cultural influence on personal financial planning can
be explained by family financial investment. On the other hand, 30.5% variations in a family
financial investment cannot be described

By these five variables. Secondly, Durbin-Watson equal to 1.984 which means the value is in the
range of 1.5 - 2.5 so that, there is no problem of auto-correlations.
Table 12 Model Summary
R R Square Adjusted Std. Error Durbin-
R Square of the Watson
Estimate
.695a .482 .460 .50174 1.984

4.5.2. ANOVA
ANOVA shows the Significance of the Overall Regression Model, the Relationship between
practice of personal financial planning, knowledge of personal financial planning, financial
literacy, strategic investment planning and cultural influence on personal financial planning to
have influence on family financial investment, It suggest that F = 21.624 and that the model is
significant with a value of 0.000.
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Table 13 ANOVA
Model Sum of Df Mean Square F Sig.
Squares
Regression 27.218 5 5.444 21.624 .000b
Residual 29.202 116 .252
Total 56.420 121

4.5.3. Coefficient table

Coefficients Table Presenting Significance of model variables and Expected Changes of family
financial investment with Changes practice of personal financial planning, knowledge of
personal financial planning, financial literacy, strategic investment planning and cultural
influence on personal financial planning .Based on the below to determine whether a positive
relationship exists between practice of personal financial planning and family financial
investment ,the researcher used multiple regression analysis and results revealed that at (p-value
-.031,t-value 0.738). So H1 is rejected but there is significant positive relationship between
practice of personal financial planning and family financial investment. Knowledge of personal
financial planning is also positively related to the family financial investment and significantly
accepted (p-value 1.982., t-value 0.050), hence H2 is also accepted.

The table below shows there is strong a significance relationship between family financial
investment planning and financial literacy with (p-value 3.471, t-value 0.001).similarly, H3 is
accepted .there is a positive connection between family financial investment and financial
literacy.

There is significant positive relationship between family financial investment and strategic
investment planning with (p-value 0.881, t-value.380) H4 is rejected but it has significant
relationship between family financial investment and strategic investment planning.

Last but not least, the table below shows there is a significance relationship between family
financial investment and cultural influence on personal financial planning with (p-value 3.499, t-
value .001). In other words H5 is accepted.

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Table 14: Multiple regression analysis:
Dependent Variables Dependent = family financial investment
Standardized Beta
Practice of personal financial planning -0.031
Knowledge of personal financial planning 0.186
Financial literacy 0.346
Strategic investment planning 0.081
Cultural influence on personal financial 0.296
planning
R2 695a
Adjusted R² 0.460
F VALUE 21.624
D-W 1.984

Table 15 Coefficient
Model Beta Tolerance Significant
Practice of personal financial planning -0.031 -0.335 .738
Knowledge of personal financial planning 0.186 1.982 .050
Financial literacy 0.346 3.471 001
Strategic investment planning 0.081 .881 .380
Cultural influence on personal financial 0.296 3.499 .001
planning

78
4.6. Hypothesis testing:
Table 16 Hypothesis Analysis

Variables Hypothesis T-value P-Value Testing Decision

PPFP H1, b1>0 -0.335 .738 P>0.05 Rejected H2
H0, b1=0
KNPFP H2, b2=0 1.982 .050 P=0.05 Fail to reject H2
H0, b2=0
FL H3, b3<0 3.471 .001 P<0.05 Accepted H3
H0, b3=0
SIP H4, b3>0 .881 .380 P>0.05 Rejected H4
H0, b3=0
CIOPFP H5, b3<0 3.499 .001 P<0.05 Accepted H5
H0, b3=0

Table 17 Summary of the hypothesis testing

N Hypothesis RESULT
O
1 H1 There is significant positive relationship between practice of personal Rejected
financial planning towards family financial investment

2 H2 There is a significant positive relationship between knowledge of Accepted

personal financial planning towards family financial investment
3 H3 There is a significant positive relationship between financial literacy Accepted
and family financial investment

4 H4 There is a significant positive relationship between strategic Rejected

investment planning and family financial investment

5 H5 There is positive relationship between cultural influences on personal Accepted

financial planning to family financial investment.

79
5.11. Conclusion:
This chapter developed and investigate the relationship between five independent variable and
dependent variable in a real data collected by using quantitative methodology in order to
discovery true validity research among the population live in kuala lumpur. The results confirm
that practice of personal financial planning and family financial investment is a complex
construct which consists of several components. These components are having knowledge,
literacy, and strategy investment planning along with knowing where cultural influence on
personal stands from financial planning. Furthermore, the results of a regression analysis show
that these three dimensions are significantly related to family financial investment in depth.

80
 CHAPTER 5

DISCUSSION, LIMITATIONS, RECOMMENDATION AND CONCLUSION

81
 CHAPTER 5

DISCUSSION, LIMITATIONS, RECOMMENDATION AND CONCLUSION

5.0 Introduction
This chapter concludes the results and the findings based on the analysis conducted on chapter
four to summarize this research. It covers six parts, part one is the discussion of the comparison
of the findings gathered in the study with the previous thesis done by other researchers. Part two
is to summarize the characteristics of respondents and major results of the research. Part three,
conclusion, gives the concluding part of the study. Part four is recommendations that explain
how the findings can have impact on family financial management; it also provides some
suggestions and recommendation for the study as actions of a whole. Part five is theoretical
implication. Part sixth is implications. Lastly, part five gives the limitations of the study and
suggestions for further research.

5.1 discussion the factors that influence on family financial investment

The purpose of this research is to examine factors that influence family financial investment. The
objective was to know whether the independent variables (practice of personal financial
planning, knowledge of personal financial planning, financial literacy, and strategic investment
planning and cultural influence on personal financial planning) influence the dependent variable
(family financial investment). This present study paves the way to make an effort in applying an
integrative approach to a newly context of family financial investment. Earlier researchers in
family financial investment have overlooked the importance of combining models to provide a
broader explanation of practice of personal financial planning and family financial investment so
the existing research does not specifically address the relationship among family financial
82
investment ;practice of personal financial planning, knowledge of personal financial planning,
financial literacy ,strategic investment planning and cultural influence on personal financial
planning.
Conclusive research was used for this research because it is typically more formal and structure.
It is based on large, representative sample and data obtained is subject to quantitative analysis.
The sources of information were gathered from the finance practitioners, business owners in
Kuala Lumpur city Centre and central market, and lectures and workers in Lincoln and Malaya-
wales universities in kuala Lumpur, Malaysia. A total number of 123 questionnaires were
distributed but only one set is left by the responder.so the researcher analyzed 122 set of
questionnaire.
After get the feedback from the customer software called statistical package of social science
(SPSS) version20 was used in order to analyze the data and check the possible existence of
relationship between family financial investment and five independent variables which are
practice of personal financial planning, knowledge of personal financial planning, financial
literacy, strategic investment planning and cultural influence on personal financial planning.
Therefore, this part discusses and assesses the results obtained as a result of the findings in
Chapter four. The used demographic factors include the gender, ethnic, age, education level,
employment status, marital status, income per month.
In multiple regressions analysis results, financial literacy, knowledge of personal financial
planning and cultural influence on personal financial planning has strong positive significant
towards family financial investment (sig 0.050 ,0.001and 0.001respectively).It indicates that
these three independent variables are the major influences of family financial investment.
This research Shows that, financial literacy, knowledge of personal financial planning and
cultural influence on personal financial planning play an extremely important role for the
selection of family financial investment therefore these three variables become the main factors
that influence family financial investment.
Base on the findings of this research, only three hypotheses (H2, H3 and H5) have been
accepted, financial literacy, knowledge of personal financial planning and cultural influence on
personal financial planning. The results found from this study shows that among the five
variables were studied; two of them, practice of personal financial planning and strategic
investment planning are not significant.

83
As The results show that the most respondents who need to family financial investment are
middle-aged from 21-30, married and have bachelor and master degree at the same time are
employed for wages and they have their ambition to apply family financial investment to gain
proper financial independent for their future life cycle regarding to their financial literacy.

5.2. Recommendations:
The findings of this research have revealed some interesting suggestions for future practitioners
and researchers whose aim is to study practice of personal financial planning and family
financial investment in general. The knowledge acquired from the study is expected to assist a
whole financial practitioners and particularly personal finance and family financial investment
who are considering attracting the intention to invest their wealth into the trusted companies and
build their future with financial freedom. The research will also add practical evidence to the
body of knowledge for the further study; assist to scholars to encourage the individuals and
family community in Malaysia to start early investment which is beneficial to enhance their
financial position, at the same time encourage to practice the personal financial ability to
promote the public interest rather than their own interest.
Even though the findings of this study stated that, financial literacy, knowledge of personal
financial planning and cultural influence on personal financial planning, independent variables
among the five independent variables that influence family financial investment.

The researcher recommend to determine the way you are managing your financial plan and
investment in order to secure your future life cycle fund and to accomplish your target goals.
The researcher also recommended making future research to improve the uniqueness of this
research titled; practice of personal financial planning and family financial investment.

5.3 Limitations of the study

In this research a study on practice of personal financial planning and family financial
investment in Kuala Lumpur and selected some of public area in Kuala Lumpur like central
market, KLCC, Lincoln scholars, Malaya-wales scholars, setapak city and business sectors in
Kuala Lumpur. Therefore, limitations in the research could not be totally avoided.

84
5.3.1 Insufficient source:
The most limited one of this research were not enough journals, articles, and books related
directly to this study that can facilitate to conduct such kind of research.
5.3.2 Availability of respondents
Most of the respondents were not easy to respond quickly to the questionnaire

5.4 Conclusion
In summary, for whole study of this research is extremely important for every single human
either individual or family because this research will guide you to the best life balancing for you
future and beloved one. And also has concluded the results of this research finding in chapter
four; discussed and recommended the research objectives. The implications of the research have
been presented as a theoretical and practical implication in order to understand easily. Then,
recommendation and suggestions for future research followed. In this study we have been
investigated and examine the significant relationship between the variables, and its factors
influences to family financial investment
According to the finding of this research, the main objective of this research was achieved. The
most important purpose of this research is to investigate, determine and to know how family
financial investment influence with the five independent variables. In a short of words, this
research, has useful for future resources found because I gathered a lot of information which is
extremely important for individuals an family and combined many variables and tested not done
it before.

85
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5.6 APENDEX
Survey Questionnaire

General Instructions and information

 All individual responses to this questionnaire will be kept strictly confidential

 This questionnaire is designed to discover your perspectives on A STUDY ON THE
PRACTICE OF PERSONAL FINANCIAL PLANNING AND FAMILY
FINANCIAL INVESTMENT.
 This questionnaire is not a will and has no legal validity it is simply a tool to help us draft
your opinion. After completion, the Study‘s aims measures and conclusions will be
reported.
 Kindly complete this questionnaire by ticking the appropriate boxes in the
questions. Your careful consideration will increase the efficiency and accuracy of the
research .your participation is greatly appreciated.

 THIS QUESTIONNAIRE IS DIVIDED INTO TWO SECTIONS:

Your participation in the questionnaire is highly appreciated.

A bout a researcher:
My name is Hawa Yusuf Mohamed. I am a master student and completed successfully my
master degree at faculty of business and Accounting in Lincoln University College. When I
began my master two years ago I was very excited about the bridging between my
bachelor degrees and to be master qualified. I found that I was in a different place in my
life journey.to make a long story short; I hope that you see how important it is to immerse
yourself in a deserved life. You will come out a different person, has a role to play in life.

Email: xaawomataan@hotmail.com
Tel: 0182262072

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 Section A: Personal Information

Please tick the one that applies:

1. Respondent's gender :

A.Male B.Female

2. Ethnic: A. Malay B. Chinese

C.India D. Others
3. Age:

A. 20 years and below B. 21 – 30 years

C.31 – 40 years D. 41 years and above

4. Education:

A. SPM B. STPM

C.Diploma D. Degree

E.Master/PhD F. Others

5. Professional or Employment Status:

A. Employed for wages. B. Self-employed.

C. Un-employed

6. Marriage Status:
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 A. single B. Married

7. Income per-month:

A. RM 1000 - RM 1999 B. RM 2000 - RM 2999

C. RM 3000- RM 4000 D. RM 4000 - RM 9,999

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SECTION B

THE PRACTICE OF PERSONAL FINANCIAL PLANNING IN KUALA LUMPUR AND FAMILY

FINANCIAL INVESTMENT
Please tick [√] the appropriate answers according to the following 5-point Liker scale.
1. Practice Of Personal Financial Strong Disagree Neutral Agree Strong
Planning Disagree Agree
A. To practice personal plan allow you to 1 2 3 4 5
live confortable life.
B. I have short and long-term financial plan 1 2 3 4 5
C. I do understand how to practice personal 1 2 3 4 5
plan
D I have financial plan in a current situation 1 2 3 4 5
E. I practice finance as per planned 1 2 3 4 5
schedule.

2. Knowledge Of Personal Financial Planning Strong Disagree Neutral Agree Strong

Disagreed agree
A. Everyone should have some aspects of 1 2 3 4 5
knowledge to handle his/her financial
perspectives
B. I should cover my goal-based personal 1 2 3 4 5
awareness
C. I have ability, skills to pursue my life journey 1 2 3 4 5
D. knowledge inspires persons to achieve his/her 1 2 3 4 5
goals
E. Financial knowledge increase personal well- 1 2 3 4 5
being.

3. Financial Literacy Strong Disagree Neutral Agree Strong

Disagree Agree
A. I keep records of everything, entering all 1 2 3 4 5
revenues and expenditures
B. I do assess the financial situation in my life 1 2 3 4 5

C I have to increase my living standards in the 1 2 3 4 5

future
D I like saving rather than spending money 1 2 3 4 5

E I like to be independent and be able to make 1 2 3 4 5

choices

4. Strategic Investment Planning Strong Disagree Neutral Agree Strong

Disagree Agree
A. my main objective for this investment account is 1 2 3 4 5
to Preserve Capital
B. I planned long- term investment goals while 1 2 3 4 5
covering risk of life
C. I should not to invest without specific aims in 1 2 3 4 5
mind

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D. I have to buy shares when they are low-cost 1 2 3 4 5
E. I have more time to invest, to plan and overcome 1 2 3 4 5
losses

5. Cultural Influence On Personal Financial Strong Disagree Neutral Agree Strong

Planning Disagree Agree
A. People‘s values are influenced by their culture 1 2 3 4 5
B. Culturally I like to eat outside rather than to cook 1 2 3 4 5
at home
C. I believe that the culture in my country encourage 1 2 3 4 5
having financial plan.
D. Religious believes influence every society‘s 1 2 3 4 5
finance
E. I believe Culture has a big influence on how 1 2 3 4 5
individuals utilize resources.

6. Family Financial Investment Strong Disagree Neutral Agree Strong

Disagree Agree
A. I balanced growth, security and to keep pace with 1 2 3 4 5
inflation.

B I understand completely how different investment 1 2 3 4 5

products work; including stocks and bonds and I
follow financial markets closely

C My main interest is high, long-term returns and I 1 2 3 4 5

am not concerned about short-term decreases in
the value of my investments

D I found the best investment for my family 1 2 3 4 5

E I prefer own family business investment 1 2 3 4 5

THE END

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