IMPACT OF FINANCIAL LITERACY ON FINANCIAL SATISFACTION: MEDIATING ROLES OF INVESTMENT DECISIONS & MODERATING ROLE OF RISK ATTITUDE

Abstract

The present research attempts to investigate relationship between financial literacy and financial satisfaction, with the specific emphasis on intervening and moderating roles of investment decisions and risk attitude. The research employs a structural equation modelling (SEM) methodology to examine the proposed associations, using survey data from subset of individuals who have previously made decisions regarding investments. The results indicate that financial behavior and literacy have a positive and significant effect upon financial satisfaction and individual investment decisions. Also, individual investment decisions were found to have a positive and significant effect on financial satisfaction. The relationship between financial literacy, financial behavior, and financial satisfaction was found to be mediated by individual investment decisions. Moderating role of risk attitude was observed between financial literacy, financial behavior, and individual investment decisions. The study highlights standing of attaining high-level financial literacy and making smart investment decisions to rise financial satisfaction for individual, corporate, and real investors.