Pursuing the Chartered Financial Analyst (CFA) designation is definitely not a piece of cake. With more than 70,000 students writing their level 1 exam globally, only 40%-44% are able to pass it. But why? Why do so many people fail it? What are some of the secrets to passing the exam?
Here are my personal tips that I used when I studied for the CFA level 1 exam and trust me they work!
Start early and have a plan- I always say: The secret to getting ahead is getting started. Whether you have 6 months or 10 months ahead, START NOW. Do not put off something for tomorrow if you can do it today. I have seen people cramming everything at the last minute and allocating only 3 months of their time towards the exam. If someone tells you 3 months are enough to study for level 1, DO NOT BELIEVE THEM. We all have commitments, full-time jobs, family, and unfortunately, unexpected situations as well. So listen to me and start NOW! The sooner you start to study, the higher are the chances of you passing the exam!
Watch lectures and take notes - I love reading books, but when it comes to reading school books, I am not a big fan. That's literally passive learning. So if you are like me, what I would suggest is rather watch videos or lectures provided by the CFA-approved providers and take notes accordingly. When needed, do additional research online to deepen your understanding.
Practice, practice, and practice - Practice from any sources you may have available: the CFA Curriculum, CFA online practice questions, or mocks. The more you do the better.
Ask questions in the various forums- One of the drawbacks of studying for level 1 is that there are no classes offered by the CFA Institute. If you want to take classes, you need to look for separate organizations that offer them for a fee. So in my situation, because I didn't want to pay more than I was already paying for the exam itself, If I had any doubts, I would turn to forums where I would pose my questions and there was always someone willing to help. Some forums I would recommend are Reddit or Analyst Forum.
Say NO to distractions - You will have friends, family, and colleagues asking you to go out, have dinner, and party even though they know you need to study. In those times, say NO. Prioritize your needs and your wants first. No one will understand the difficulty of studying for an exam, but yourself. It is ok to say NO. Celebrations and parties will come once you pass the exam #workhardpartyharder
Pay attention to the topics with the most weights - When you create your study plan, prioritize the topics that have heavier weights based on the breakdown the Institute provides or those that are the most difficult ones. Leave the "easiest ones" or those that you are most familiar with towards the end.
Create a formula sheet - Put together your own formula sheet as you practice questions and mocks. Write them as many times as possible until you know them by heart.
Do not skip any topics - While it may cross your mind to skip some readings or topics, DO NOT DO IT. Here you miss your chance of passing the exam. My one and only tip is: STUDY EVERYTHING INSIDE OUT.
Use the last month to revise and practice as much as you can - As the exam time approaches, use the last month to review concepts, formulas, go over mistakes, and practice as much as you can. A lot of people suggest taking 1 month off from work prior to taking the exam and a lot of people actually do that. I am probably the only person who doesn't take time off to study. I do have very good time management skills especially because of the 15 million things I do in life, I have no choice, but to be good at time management. If you start early and stick to your plan, you can use those days off to take a vacation and travel somewhere!
Apply concepts to real-life situations - One way to master finance concepts is through real-life applications. You can do this by reading finance books, following the market news, or even by listening to podcasts. One podcast that I enjoy listening to is Bloomberg BusinessWeek.
Have a mantra on your laptop wallpaper - Change your phone or laptop wallpaper to a mantra you believe in, the one that will keep you going in the most difficult times, and keep you motivated throughout this whole study period. Having a mantra helps you be focused on the end goal.
I don't think there are any magic ingredients in achieving a goal. Don't embark on pursuing something because the industry needs it or because you feel the peer pressure. Do it because you want to, and not because you need to; It is about enjoying the process as well. This is why many people give up on continuing with the designation after the first try. Either because it wasn't made for them or because they realized they weren't doing it for the right reasons. My suggestion is to do something because you want to and because of your passion for it. One of my friends once said- " all you need is passion and endurance"
Hard work compounds like interest, and the earlier you do it, the more time you have for the benefits to pay off. -Sam Altman
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