The Impact of Demographics on Investments
Abstract
South Africans are over-indebted; therefore, a large portion of the population will not have saved enough for retirement. South African over-indebtedness highlights the importance for banks to understand the needs of their clients and promote relevant investment opportunities. The main purpose of this paper is to analyze the total amount of South African banking clients invest, based on their demographics. The study found that each demographic factor analyzed affects the expected amount being invested. Secondary data were collected from a universal bank that agreed to participate in the study. Results indicated that male and female investors invest similar amounts; however, gender becomes a predictive variable when combined with other demographic factors. A substantial difference was found in the average amount being invested by the wealthiest investors compared to other investors. There are also inequalities between the different racial groups, with African investors of all income levels investing less than the other groups with similar income levels. The findings tie back to the history of Apartheid in South Africa, with African investors investing less than the other race groups. African investors make up the biggest portion of investors in South Africa, and banks have an opportunity to improve their investment habits. This will make these clients wealthier and more profitable for the bank and the South African economy.
Keywords: investment amount, banking industry, demographic factors, South Africa, black tax.
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