Clear loans, secure insurance before investing, says Harsh Roongta

Business Standard Smart Investor Arena 2026: Roongta said building a savings habit matters more than chasing returns early in one's career

 

Young earners should prioritise repaying loans, securing adequate insurance and building a regular savings habit before focusing on investment returns, Harsh Roongta, founder and principal officer of Fee-only Investment Advisors, said at the Business Standard Smart Investor Arena 2026.

 

“First get into the habit ... then worry about putting in more money,” Roongta said during a fireside conversation with Business Standard's Vedant Vichare on how to seek financial advice at the start of one's career.

 

He cautioned young investors against rushing into equity markets out of fear of missing out on compounding, arguing that the amount they can invest in the early years may be relatively small.

 

 

“The returns from that investment ... is not going to be something that will change your life. But if you get into the right habits, the returns on those habits will change your life,” he said.

 

Repay loans before investing

Roongta advised young earners to prioritise outstanding loans, including education loans and home loans, before investing in market-linked products.

 

His reasoning was that loan interest is a cost borrowers must pay, whereas equity returns are uncertain and can be negative in some years.

 

“If you are not repaying the loan, you are actually borrowing money to invest,” he said, adding that borrowers should consider whether they would willingly take a loan to invest in equities.

 

He also advised investors to secure adequate insurance before starting their investment journey. While those without financial dependants may not need term life insurance, he said health insurance and protection against disability and critical illness should be considered.

 

Once loans and insurance are addressed, young earners should begin setting aside a portion of their income every month, even if the money initially goes into a fixed deposit or a liquid mutual fund, he said.

 

The priority should be to make saving a routine rather than spend too much time tracking fund managers or market movements.

 

How to choose a financial adviser

Roongta said investors should understand how a financial adviser earns money before accepting recommendations.

 

“There is absolutely nothing wrong at all with people making commissions,” he said, adding that investors should know how much an adviser earns and whether the commission varies depending on the product recommended.

 

He also cautioned against expecting an adviser to consistently identify investments that outperform the market.

 

Instead, investors should seek personalised advice that takes their financial circumstances, goals and risk appetite into account. General information available online can help them understand financial concepts, but it may not be suitable for every individual.

 

Roongta said investors should also be realistic about the cost of customised advice, which can be expensive because it requires considerable time and attention.

 

Use AI to question advisers, not replace them

With artificial intelligence (AI) tools increasingly being used to obtain financial information, Roongta said investors could use them to research products, understand concepts and prepare questions for their advisers.

 

However, he cautioned against relying on AI-generated answers to make investment decisions without independent verification.

 

“Use AI to challenge your advisor, maybe even overthrow him or her ... but using AI as a substitute for an advisor, I think would not be a wise move,” he said.

 

He described an adviser as more than someone who recommends where to invest. An adviser can also act as a behavioural coach, helping clients remain disciplined during market volatility and avoid impulsive decisions.

 

“The biggest role that an advisor plays is of a behavioral coach,” he said.

 

Do not try to predict market movements

Addressing young investors disappointed with market returns after the Covid-19 rally, Roongta said market movements and crises were difficult to predict.

 

He cited the sharp market decline in March 2020, followed by a recovery that took the market back to record highs later that year, even before vaccines were widely available.

 

“Nobody can predict crises. You can't predict how markets will react to the crisis,” he said.

 

Investors should therefore avoid choosing advisers on the promise that they can predict market movements, he added.

 

“If you are looking for an advisor who helps you do the prediction, he will just be more precisely wrong than you are,” Roongta said.