Keywords

1 Introduction

The Financial foundation of any individual depends on two vital elements i.e. Saving and investments. Investment is the engagement of money to get more income in value in the future. Generally speaking, saving and investments are used interchangeably. But the fact is one needs to understand that both the terms are different, having one common motif of securing the future in terms of finance (Abhinandan. 2019).

Saving is for spending money on our requirements and, of course, for any unseen circumstances. Savings are generally in highly liquid form, as one may require at any point in time. But one must limit the expenses so that the remaining portion from savings can be invested in the long term for capital appreciation. While on the other hand, Investments are done from one's income for securing future emergencies or some plans. Investments come with the questions like the number of investments, the risk involved, time horizon, tax benefit, and many more. There are many investment avenues available like bonds, shares, real estate, insurance, pension, gold and silver, bank fixed deposits and the list goes on. The level of risk and return decides the choice of investment, and hence it is advisable to invest at an early age. With this backdrop, financial literacy is gaining more attention from various stakeholders like bankers, employees, governments, working women, businesses, and many more. Due to the introduction of new financial products, fin technologies, complications of the processes and the economic and political environment, financial literacy has increased. Investing in the UAE is candid and is stimulated by a legally friendly financial environment. UAE is considered the world's freest economy with global business culture, and hence it is considered a steady and investor-friendly hub.

2 Literature Review

The UAE has experienced incredible economic growth and extraordinary prosperity in recent decades, making it one of the richest oil-producing nations (Ali and Wisniesk, 2010). The UAE has all possible investment avenues available, just like any other economy. (Kalli, 2009). Investment opportunities in Dubai: Most of the preferred investment avenues are Real Estate, Stocks, Bonds, Mutual funds, Funds, Deposits accounts, e-saver accounts, and gold. Etc. Investors prioritize innovative economic solutions as key drivers of commercial growth and diversification.

Setting realistic goals for retirement planning is essential for working people. They should also seek professional guidance if they run into any difficulties (Alkhawaja & Albaity, 2020). Due to better living standard, salaried class people started to learn the value of saving and investment and choose to save for child’s education, marriage and emergencies rather than spending money on unnecessary luxury items (Sood & Kumar, 2015).

The financial market is the backbone of an economy. Share capital is made available through the financial market and creates a lucrative climate for savings and investment. The author has discussed different investment options to choose from. Based on the risk-return trade-off, investment options can be selected. It says that the definition of perfect investment is different for different people and therefore, the first step for investment should start with recognizing the investor's need. (Manikandan and Muthumeenakshi, 2017).

The savings and investment pattern of salaried women in the Coimbatore district to evade any emergencies coming into their lives needed for systematic planning for their financial needs. The study was done using questionnaires, and it was analyzed through percentage and Friedman rank tests. It was found that the investment pattern was varied due to taxation slab, safety, and return, regular income (PAVITHRA, 2018).

The following six factors were the most influential ones like expected returns, how fast will it take to be rich, stock volatility, the company's record, government holdings and the making of organized financial markets. At the same time, they also came up with the least important factors: expected losses in other investments, expected losses in International financial markets, religious acceptance, family judgment, and one's gut feeling (Al-Tamimi, 2005).

The level of financial literacy in the UAE is below the expected level and depends largely on education, nature of job and level of income. Those who are working in the financial sector such as banking, insurance and investment are more likely to be more aware about different financial terms and investment avenues. (A. Hassan Al-Tamimi and Bin Kalli, 2009).

A report was made available with all the necessary information required while making investments in the UAE. This guidance included saving accounts investments, pension investments, property investments, business investments, investments in funds, stocks and shares and finally, taxation in UAE with useful investment advice. It was concluded with the statement saying that check before you invest and do your homework! (Lazell, 2021).

While attempting to examine the investment pattern of different classes of working women, households, rural population, salaried people, teachers and others, it was found that the behaviour of each class is different from one another. The reason may be the risk level and the investment awareness. Bank fixed deposits were the most preferential investment avenue, making it clear that Indian people still believe in the traditional investment model (Abhinandan. 2019). The attitude towards spending and risk are positive and not insignificantly are related to the awareness of investment options. There is a need to introduce policies and take action to make young generation aware about the investment and it’s importance.

The objective of this report was to check the financial debt status in the youth of UAE. It is believed that this will serve as a platform to develop financial literacy and good investment practices to protect the youths’ interests. This report comprises six chapters and six appendices with all the fact sheets and recommendations. This report starts with defining financial literacy, literature review, bank support, on-going programmes on financial literacy and implementation plans (Unknown, 2012).

This study tried to compare the youth who migrated for education with the youths who migrated for jobs and further examined the features of family financial planning. After the survey and some information from records, it was found that youth's migration for education and jobs had one common thing: the increasing age (Wissenschaften, 2015).

The relationship between savings and income is found and made it evident that people prefer safe and liquid investments which can give them tax benefits, more returns and shorter lock-in periods (Dhawan & Mehta, 2019).

It was found that the youths were very active savers using informal methods of saving for their school fees and some other expenses in Ghana but now, they were quite acquainted with the formal methods of saving (Gina A.N. Chowa, 2012).

Numerous studies have been conducted on the various aspects of savings and investment patterns, awareness about investment avenues, factors affecting the choice of investment avenues and the list. These studies mainly focused on factors like time horizon, risk and return trade-off, tax benefit, to name a few. However, not much research has been done on savings and investment patterns during the first ten years of employment.

2.1 Objectives

  1. 1.

    To study the various investment avenues available for salaried Employees in the Dubai region.

  2. 2.

    To analyse various motivational factors of salaried employees in their first ten years of career.

  3. 3.

    To study factors affecting the investment behaviour of the employees.

Hypothesis

H01: There is no significant relation between Gender and awareness about investments.

H02: There is no significant relation between Income level and the selection of investment avenues.

H03: There is no significant relation between Gender and the selection of investment avenues.

2.2 Scope of the Study

This study focuses only on the savings and investment opportunities of the employees; it is useful to know the best investment opportunities and their preferences in the market available for the employees in their early employment.

2.3 Significance of the Study

The first few years of employment are crucial for the young people who just started to earn and it is crucial to learn how the majority consume the money they earn. Employees usually have a fixed source of income, and various investment opportunities are available in the market. In this regard, the researcher tried to discover the investment behaviour of employees in the UAE. It is also helpful to know about employees’ investment opportunities and preferences.

2.4 Research Methodology

The validity of any research depends on the systematic data collection and data analysis method. For this study, researchers have collected primary and secondary data sources. The primary data was collected from investors who are in the age of the first ten years of their employment in UAE. The data was collected through an online survey with the help of Google Form which was designed and administered to the respondents. A probability sampling method was selected for this study. Simple random sampling was used to select the respondents in their first ten years of employment. The research instrument was administered to 120 respondents out of which 118 were returned. 2 respondents could not return the form and hence the final sample size was 118, with 65 men and 53 women participating in the survey (Table 1).

3 Results and Discussion

Table 1. Demographic factors (Observed Frequency)
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It is observed that the majority of the respondents are from the age group of 26–30 years followed by 21–25 years. The majority of the respondents are aware of Savings and Investments. Awareness is increasing as age increases (Table 2).

Table 2. Gender (Observed Frequency)
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It is observed that the majority of the respondents are males, 55%, followed by females. Males are more aware of Savings and Investments than women (Table 3).

Table 3. Income Group (Observed Frequency)
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It is observed that the majority of the respondents are from the income group of AED 20,001 to AED 30,000 followed by the group of AED 10,001 to AED 20,000. The level of awareness towards saving and investment increases as per the level of income group (Table 4).

Table 4. Monthly Saving of the employees (Observed Frequency).
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It is observed that the majority of the respondents (46%) are making Savings and Investments monthly between 10 to 20% of their income and only 3% of the population saves above 50% of their salaries (Table 5).

Table 5. Factors Considered for Selecting Savings and Investment Avenues
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It is observed that the majority of the respondents are selecting savings and investment avenues that are future security followed by safety, tax savings and liquidity. A limited population goes for the diversified investment avenues (Table 6).

Table 6. Challenges Faced for investments:
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It is observed that the majority of the respondents facing challenges related to savings and investments are living standards as the cost of living is more followed by market regulations and transparency in the investment avenues.

Hypothesis:

H01: There is no significant relation between Gender and awareness about investments.

H02: There is no significant relation between income level and awareness regarding the investment avenues.

H03: There is no significant relation between Gender and the selection of investment avenues.

Hypothesis testing:

H01:

Ho1a: There is no significant relation between Gender and awareness about investments.

H01b: There is a significant relationship between Gender and awareness about investments.

To test this hypothesis, we can look at the chi-square values obtained for each investment instrument in Table 7.

Table 7. Investment Instruments and gender analysis
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Average Chi-Square value: 4.19: df = 1; Significant.

At 95% confidence level, χ2cal is greater than χ2 critical.

H01a: The null hypothesis states that there is no significant relationship between gender and awareness about investments.

H01b: The alternative hypothesis states that there is a significant relationship between gender and awareness about investments.

Therefore, we reject the null hypothesis and conclude a significant relationship between investment awareness and Gender.

H02:

H02a: There is no significant relation between income level and awareness regarding the investment avenues.

H02b: There is a significant relation between income level and awareness regarding the investment avenues.

Table 8 Chi-square test
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Table 9. Relationship between Income Level and Awareness Regarding Investment Avenues
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Since p-value of 0.284 would be bigger than if the significance level at 0.05, indicating that the result is not statistically significant and would fail to reject the null hypothesis (H02a) (Table 8).

It can be concluded that there is no significant relationship between income level and awareness regarding investment avenues (Table 9).

H03:

H03a: There is no significant relation between Gender and the selection of investment avenues.

H03a: There is a significant relation between Gender and selection of investment avenues.

Table 10. Tests of Equality of Group Mean
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The hypothesis that tests the coefficient of gold if zero couldn't be rejected. So, gold was found to be insignificant at the 5% level of significance. All the coefficients except gold were significant at a 5% significance level. Males prefer all investment avenues except gold. Thus, at a 5% significance level, there is significant difference between gender and investment avenues (Table 10).

Recommendations: Every employee should make a yearly and monthly budget of their expenditure. They have to invest in liquid funds for immediate encashment when required. All employees need to make review of income and expenditures quarterly so that they can save more. For different savings and investment avenues employees should consult a Financial Adviser. They need to make retirement plans and accordingly they should start savings and investments. Further research can be conducted in the field of saving and investments, age and attitude for saving and investment etc.

Conclusion: On the data analysis it can be concluded that men are relatively more aware of the investment and savings avenues as compared to the women. More research can be conducted on the investments made by women and men in different avenues and the sources they rely upon so as to get more insights. In addition, research can be focussed on the study of investment behaviour in the early year of employment and the retiring years of employment. Similarly, the study indicates a strong relationship between educational qualification and the investment avenues. Educated individuals are likely to explore more alternatives of investments on the basis of their knowledge. Further, it could also be concluded that women are more driven to invest in gold as compared to their male counterpart.