CHAPTER – 5

FINDINGS, SUGGESTIONS AND CONCLUSION

INTRODUCTION
Understanding the savings habits and investment preferences across various
income groups is crucial for designing effective financial policies and strategies. This report
presents analytical findings derived from a comprehensive study conducted on the savings
habits and investment preferences among different income groups in Chennai. Through
rigorous data analysis, this study aims to shed light on the patterns, disparities, and factors
influencing savings and investment decisions among individuals from diverse socio-
economic backgrounds.
The city of Chennai, as a prominent economic hub, offers a rich landscape for examining the
financial behaviours of its residents across various income brackets. This study delves into
the intricate dynamics of savings and investment choices, considering factors such as income
level, education, age, and occupation. By uncovering insights into these aspects, stakeholders
can gain valuable insights to tailor financial literacy programs, investment products, and
policy interventions that cater to the specific needs and preferences of different income
groups.
The findings presented in this report not only contribute to the existing body of knowledge on
personal finance but also provide actionable recommendations for individuals, financial
institutions, and policy-makers alike. By bridging the gap between research and practice, this
study seeks to foster a culture of informed decision-making and responsible financial
management among the residents of Chennai, ultimately promoting economic stability and
prosperity across all segments of society.

5.1 Findings of the Study

5.1.1 Findings Based on the Percentage Analysis:
 We found that most respondents were male, making up 73.4% of the total. Only
26.6%
were female. This shows a big difference in the number of men and women participating.
To be socially responsible, we need to think about ways to include everyone equally in
financial discussions and opportunities.
 • We observed that the age reveals the majority of respondents, comprising
52.3%, fall within the age group of 20 to 40 years. Additionally, 18.1% of
respondents are under the age of 20, 18.7% are aged between 40 and 60, and only
11% are above 60 years old. This indicates a strong presence of younger adults in the
study, suggesting a focus on the financial behaviours and preferences of this
demographic.

• We note that 50.3% are Under-graduates with greater response as they are the most
researching generations of up today life and young age tends more searching that very
young and medium level of category of people.

• We identified that the data shows that self-employed individuals (34.8%) and retirees
(6.5%) are the main investors. Self-employed folks seem hands-on, likely because they
want to grow their wealth independently. Retirees also invest, but they're more careful,
aiming for stability and income. Despite being fewer, retirees still work to secure and
grow their finances during retirement.

• We identified that many people earn less than 2 lakh per year, likely facing money
challenges. They need affordable financial services. But 11% earn 8 lakh or more,
suggesting they have money to save and invest. Banks could offer special services for
them.

• We observed that most people save less than 25,000 a year, indicating financial
challenges. They need simple and accessible financial help. But 12.3% save over 75,000,
suggesting they have more money to save. Banks could offer them special services for
managing their wealth better.

• We find About 36.8% of people are willing to invest up to 20% of their savings,
showing they're okay with taking risks to grow their money. Banks could offer them
options that match their goals. On the other hand, 9% of people prefer playing it safe,
investing only up to 10% of their savings. They prioritise keeping their money secure.
Banks could offer them safer investment choices like bonds or mutual funds.
 • We identified around 23.2%, of people are saving to make more money, showing
they're keen on growing their wealth. They might be investing in things like stocks or real
estate. This suggests they're actively planning and working towards improving their
finances. On the other hand, 7% of people are saving mainly for tax benefits. They're
likely using tools like retirement accounts to lower their taxes. This shows they're
carefully managing their money, making smart decisions to save on taxes.

• We found that most people (38%) are looking at shorter-term goals for their money.
They might prefer investments with moderate risk and quicker returns, like certain stocks
or mutual funds. Financial advisers can help these folks find the right investments for
their shorter-term goals. On the other hand, 27% of people are thinking long-term.
They're interested in investments that take more time to grow, like retirement accounts or
long-term bonds. Financial institutions can offer them services that focus on the benefits
of growing their money slowly over time. Understanding these different approaches helps
banks and advisers offer better help to their customers.

• We found that many people (36.8%) are okay with taking some risk in their
investments but want to balance it with potential profits. They're looking for a middle
ground between making money and keeping things safe. Financial institutions and
advisers can help these folks by offering them a mix of investments that match their
moderate risk tolerance. On the other hand, a smaller group (15.5%) prefers to play it safe
and avoid any risks. They prioritize keeping their money safe over making big profits.
These people might prefer things like bonds or other low-risk options. Financial
institutions can assist them by providing investment choices that focus on keeping their
money safe and avoiding big swings in value. Understanding these preferences helps
banks and advisers offer better guidance to their clients.

5.1.2 Findings based on the Chi-Square Analysis:

1. Investor Category X Reason for Savings:
The study examined how people invest their money based on why they save it. It
found that there's a connection between these two factors, but it's not very strong. This means
that while it seems like there might be a relationship between how people invest and why
they save, it's not significant enough to say for sure. So, there's some correlation, but it might
just be by chance rather than a meaningful pattern.
 2. Annual Savings X Percentage of Investment from Savings :
The study looked at how much people save each year and how much of that they
invest. It found a strong connection between these two factors. Basically, the more
someone saves annually, the more likely they are to invest a larger portion of their
savings. This link was so clear that it's highly unlikely to be just a coincidence. So, when
people save more money every year, they tend to put a bigger percentage of it into
investments.
5.1.3 Findings based on the Correlation Analysis:
1. Source of investment information X Various investment option that you are aware:
The analysis on investment awareness and information sources showed weak
overall connections, with none reaching statistical significance at the typical level. However,
some interesting patterns emerged. Depending heavily on specific sources seemed to limit
awareness of real estate options. Yet, there were moderate positive links among various
investment options like mutual funds, shares/bonds, gold/silver, fixed deposits, real estate,
and liquid funds, with shares/bonds and mutual funds having the strongest connection.
Overall, while the relationships were weak, certain trends suggested how people's reliance on
information sources could influence their awareness of different investment opportunities.
3. Annual Income X Factors promoting Savings and Investments :
The correlation analysis shows that annual income is significantly related to various
factors influencing savings and investment decisions. People with higher annual incomes
tend to view their financial condition, state economy, government policies, interest rates,
and long-term benefits more positively. This suggests that those with higher incomes are
more optimistic about their financial situation and the broader economic environment,
leading them to make decisions that favour savings and investments. In simpler terms,
how much money someone makes can affect how they see their financial situation and the
economy, influencing their choices about saving and investing.

5.2 SUGGESTUIONS:
The research on savings habits and investment preferences among different income
groups in Chennai, several actionable suggestions can be proposed to enhance financial
well-being and promote inclusive financial practices.

 Firstly, there is a need for targeted financial education programs that cater to individuals
from diverse income backgrounds. These programs should cover essential topics such as
 budgeting, saving strategies, understanding investment options, and risk management. By
increasing financial literacy, individuals can make more informed decisions about their
savings and investments.
 Promoting accessible investment platforms is essential to ensure that individuals across
all income levels have access to suitable investment options. These platforms should
offer a range of investment opportunities tailored to different risk tolerances and
financial goals. Moreover, providing educational resources alongside these platforms can
empower investors to navigate the complexities of the financial market effectively.
 Encouraging systematic savings practices is another crucial step towards improving
financial outcomes. By promoting habits such as automatic transfers to savings or
investment accounts, individuals can build wealth gradually over time, regardless of their
income level. Additionally, incentive long-term investing through policies such as tax
benefits or employer-sponsored retirement plans can further encourage individuals to
plan for their future financial security.
 Addressing information gaps by providing clear and transparent information about
investment options and risks is essential. Financial institutions and regulatory authorities
should ensure that individuals have access to comprehensive and accurate information
about investment products, fees, and potential returns. This will empower individuals to
make well-informed investment decisions aligned with their financial goals.

5.3 CONCLUSION:
In conclusion, the study on savings habits and investment preferences among different
income groups in Chennai provides valuable insights into the financial behaviours and needs
of the city's diverse population. The research highlights the importance of tailored financial
education, accessible investment options, and systematic savings practices to promote
financial well-being across income brackets. Additionally, the findings underscore the
significance of addressing information gaps, fostering collaboration between stakeholders,
and incentivizing long-term investing to ensure inclusive and sustainable wealth
accumulation. By implementing targeted interventions and strategies based on the study
findings, policy-makers, financial institutions, and community organizations can work
towards fostering a culture of financial empowerment and resilience for individuals and
communities across Chennai.