How to Pass All Three Tests. You Can Do It! recently, posting, beginning, only

cyber21

I'm posting this once each in the L1 forum and General Discussion forum.

If this is the beginning of your marathon or if you're discouraged after an unfavorable result at any level, I wanted to share my thoughts and hopefully offer some optimism and inspiration for others.

This will be my first -- and last -- post, call me a "lurker" but I didn't use AF much and only recently discovered it, but thought it would be nice to pass along some wisdom to those who plan to use it.

I. HOW TO PASS
II. LEVEL-SPECIFIC THOUGHTS
III. MYTHS / ARE 250+ HOURS REALLY REQUIRED?
IV. FINAL BIG PICTURE THOUGHTS

I. HOW TO PASS
1 - You CAN pass all 3 without studying the CFAI books & using only 3rd party providers. Some people have their preference over one provider or the other. Reading the official books will most definitely enhance your knowledge and give you an exam-day edge over other candidates, but you don't want to get caught in the weeds (there can be too much detail in the official versions). 3rd party books help you focus and target your efforts a lot.

2 - Everyone has a different style of learning. Stay true to what worked for you in undergrad or grad school. Some people learn by "reading", others by "doing". Some people prefer flashcards, others don't. Some don't take notes, others do. Some like study groups, others prefer individual efforts. My point is just stay true to yourself and don't focus on what other AFers are or are not doing.

3 - That being said, I highly recommend doing hundreds of practice questions over the final weeks (from 3rd party providers AND what's in the official books at end of chapters) and at least one official CFAI mock exam, if not multiple mocks from a 3rd party as well. I believe the questions in particular are helpful and will definitely boost the probability of you passing

4 - I recommend that you NOT start too early, but others will disagree. I never really truly got going until 2 to 3 months before the exam in order to avoid burnout. You can pass with 2-3 months of study. Burnout aside, I also find it difficult to remember concepts that I learned many months ago. I'd rather spend "double time" in the weeks leading up to the test to keep the concepts fresh. My personal opinion, others may disagree. But many have proved this point by passing L1, L2, and L3 with a month or less of study at each.

5 - Stay relaxed, even in the final weeks. Use Friday + weekend evenings to stay social and see your friends, spend time with your spouse / significant other / children. Too much stress leading up to it can doom you on exam day. Exercise, even if it's less than you were able to before! Eat healthy! Relax right before the exam (stop studying 6PM Friday at most) and get a good night's sleep. Confidence on exam day will get you past the hurdle.

6- People pass with and without AF. If you find the forums helpful whether you are a contributor -- or a lurker like I was -- great, but people pass all the time without this forum too. Overall, it's about preparation.

II. LEVEL-SPECIFIC THOUGHTS
- Difficulty by Level (my approximation): L1 ~5/10, L2 and L3 ~9/10. Level 2 is by far the hardest in terms of topic difficulty and the extremely wide breadth of materials you need to study for. L3's readings are easier than L2, but I believe the test format is the hardest of the three for 2 reasons: 1) the morning essay format is more difficult than a regular multiple choice, and 2) the fact that in both the AM and PM sections they are weaving multiple concepts across the entire reading together so your brain must integrate different readings together more so than L1/L2

- L1 is easiest to "game" because there are more total questions on the exam and therefore each individual question is worth less, so you can skip/guess a difficult question more easily because its "hit" to your score won't be as bad. My overall study advice: Focus on the biggest topics covered in terms of % weight of exam, and don't skimp on ethics.

- L2 becomes harder to game because of the 'item-set' 6-question format. However, if you cover the big topics (namely accounting/financial statement analysis) you can somewhat "game" it again by purposely being weaker in smaller areas. You're forced to remember a lot of mathematical formulas in this one and it's intimidating, so focus on the big picture weightings.

- L3 in the morning is essay format, but not a free-flow, multi-page essay. It's short answer, it's template-format. Bullet-points work -- don't forget this when you get there! Make sure you know 90% of the curriculum, because you're going to have to integrate concepts from different readings together -- that's part of the CFAI's goal, I believe. Time management is especially key for this one: the AM essay part trips up a lot of people, so if you don't know an answer, don't spend too much time on it and focus on finishing the rest of the essay questions.

III. MYTHS / ARE THE 250+ HOURS RECOMMENDED BY CFAI REALLY REQUIRED?
- Before anything, I'll caveat this. With a finance, accounting, or even econ or statistics undergrad/grad background, no, 250 hours are absolutely not required. ESPECIALLY if you have a few years of investment banking / PE / HF / S&T experience. I had worked in that land when I started the program in my mid 20s (and finance undergrad). So if you have a similar background, don't worry about the 250: I personally put in <75 hours and passed L1 in first try. In L2, I probably spent 100 to 150 hours and passed on first try. In L3, I failed the first time on a compressed, 8 week schedule but overall put in close to 300+ combining two attempts. If you're non-finance/accounting background, e.g. engineer by trade or have a liberal arts degree, it will take more time (closer to the 250 hour "official recommendation"). But I tend to think engineering majors are smarter than us finance majors so don't despair you should be okay!

IV. OVERALL THOUGHTS / IS THIS THE END-ALL?
- I know people without the CFA who make multiples more money than people who have the designation. IMO, we shouldn't think this will necessarily change your life, but I will grant that yes for some of you, it may be more important at some firms than others. Still, don't lose sight of the big picture: most of your friends/family who are not in finance have no idea what this is and why you're putting yourself through this, so don't think this is the end-all to career happiness. Life is meant to be lived... family, friends, interests outside of work. This is a sacrifice and a big accomplishment, but if you're taking over a decade to get there, I'm not saying to quit because many persevere with this after a decade ... just start to think -- will it give you a raise? a better job? more career happiness? I viewed this as a nice personal accomplishment -- that and only that, not something that will give me a raise or a promotion (admittedly, as I said at the beginning of this paragraph, some firms do view it that way, though) -Just view it like that and keep your friends/family in sight and I think it will be easier to get throught he study

- I have not done an MBA, but I don't see this as a substitute for one. So my take - don't think of it that way. When I first started at L1, I used to view it as a (cheaper) substitute, but I have come to realize that they are two different things. Very different. I'm sure people who have done both may agree here. They are complements, not substitutes. Figure out if the CFA is right for you, just as a potential graduate student should figure out if an MBA is right for her or him.

- That's really it. I did some group study (5%) but mostly individual (95%), I made my own flashcards for concepts I had trouble with, and as far as prep I used Schweser study notes at all 3 and enhanced with a) Stalla videos in L2 / L3 and b) CFAI official books in L3. Depending on my schedule I did early mornings or evenings, but was most productive on weekends (and could still go out at night). Everyone's different -- find your most comfortable routine and go with that!

No matter how discouraged you may get during study or after an unfavorable exam result -- you can do this if you put your mind to it, so don't give up!

Good luck everyone!!!

cfa10yrplan

I didn't read all that, but props for putting that together. I kept scrolling to see the pitch for your blog. Nicely done sir.

_____________________________________________________
-My friend QQQbbe, we will never forget you.

BC_MBA_student

good post that summarizes a lot of things. I think the main thing is that everyone is different, but this post shows what can be done. Some people can read the CFAI books in 150 hours and pass all 3 exams in 450 hours, others take 450 hours on L1. Some people like reading Schweser and others like the CFAI books.

Nice review of the 3 levels for sure.

tarunajwani

Yup, I know a person who had an undergrad in Medieval History and got into finance making big money because her daddy owned the firm.

You can make big money without any credentials, alright!

eoin

I know a guy who didn't do sh*t, dropped out of college and randomly won the lottery.

You can definitely make big money without the CFA, I agree.

hw0799

The true path to happiness:

During your senior year of undergraduate studies, receive an offer in either trading or investment banking in the autumn recruiting season. Take and pass level 1 in December, level 2 in June. Graduate, start work, and stick close to senior personnel at the office, become proficient in Bloomberg (even if you don't have a terminal), pass the necessary series exams within the first 3 months of employment (by end of August). (Passing cfa level 2 allows you to skip the series 86,87 exams, so wait until you get your results before you sign up for 86,87. Just take and pass series 7,63 exams) Finally, sign up for level 3 cfa in August. At this point, you are well ahead of the game, while the rest of your analyst class is mostly clueless about the industry. Again, make sure to stick close with senior personnel at the office, and create a network of mentors (they don't have to be much older than you). As you are wrapping up your 3 month training and introductory period for new hires at the young age of 22, you will be on your way to a successful career in which you can focus on your job/networking, and not finance exams.

DSquaredSlim

greengrape, good catch. That really does kill the path to happiness. Below, the revised true path to happiness:

1. Harvard undergrad (level 1 cfa), straight to Harvard B-school (level 2, level 3 cfa)
2. Start 6 figure job at age of 23, dominate, find trophy wife in the city.
3. Buy an apartment to raise the family
4. Become truly happy before you hit the quarter century mark.

brain_wash_your

Ohai may be right. Undergrad -> Analyst -> MBA -> Associate is the way to go if you want a career in IB.

comp_sci_kid

ohai Wrote:
-------------------------------------------------------
> If you
> went straight from college to an MBA program,
> there is a chance that you will be excluded from
> analyst positions for being overqualified, and
> then excluded from associate positions due to a
> lack of work experience.

dead on.

HuskyGrad2010

ohai, you're forgetting internships. The harvard undergard will intern during his junior summer, and will also intern after his first full year at harvard bschool. There are also winter externships. These experiences and networking opportunities, on top of his young age, CFA charter, and top tier education, should qualify him for analyst jobs, as well as associate jobs on both sellside and buyside once he comes out of bschool at the ripe old age of 24.