How I passed CFA Level 1 interested, accounting, background, experience, management

Wasteoftime

I thought I would share my experience with anyone interested on how I passed the Level 1 Exam this past June on my first try. In addition, I achieved >70% across all categories so I feel I knew the material. See below for my "pearls of wisdom" and recognize that everyone starts from a different point based on background and experience.

My background: graduated with a MBA and a concentration in asset management. I took classes in financial statement analysis, accounting, statistics, fundamental analysis, portfolio management, economics, investments, derivatives and risk management and venture capital. I graduated top of my class (because I was willing to work harder than my peers). I have worked in the financial services industry for 11 years, and roughly 5 years of that in an investment decision-making role with my most recent role as an equity analyst for a RIA.

My experience: I initially began studying the first week of January with the intention to read all of the CFAI text. I began highlighting in book 1 and taking notes. I got bogged down in the material (despite spending significant amounts of time studying) and felt that the Quant Methods was incredibly boring and somewhat confusing. At the end of February (almost 2 months of work), I finally finished book 1 and began book 2 (Economics). At this point, I realized I would never finish in time. I reassessed my options and decided to order the Schweser text. I was able to complete all of the Schweser texts in about 2 months and was able to begin reviewing by early May. I spent the last month reviewing my formula sheets, redoing practice problems from various chapters and taking a few practice exams. I also took a review class with the Boston Security Analyst Society which I felt was excellent and helped reinforce information (particularly Fixed Income). My final 3 weeks of review were scattered at best as I felt like I had burned out, was balancing work/studying and a 5 month old baby, and truthfully had lost some drive. I spent my final day before the exam studying for a couple hours and then watched TV.

My secrets to passing:
1. Obtain the Schweser texts and use these as your primary source of material. After reading each chapter, do the problems and then skim through the CFAI corresponding chapter to make sure nothing is missed (only found a few discrepancies). Do the CFAI EOC questions as the CFA problems may test concepts differently. I thought this helped to reinforce concepts. I found this particularly true in some parts of equity analysis and portfolio management.

2. DO THE EOC PROBLEMS AT THE END OF EACH CHAPTER: I know I already said this but it is very important. It is not enough to just read the text.

3. Print a hard copy of your calendar covering your studying start date to the exam date. Count the number of pages you need to read in the Schweser text. Then divide this figure by the number of weeks you will study (leave 2-3 weeks to review). Now you have your weekly reading total. Then, mark on your calendar which days each week you will study and how many pages per day. This seems tedious but it gave me the confidence that I would finish in time and kept me on track. I focused on 1 hour before work, studying during my lunch, doing a few hours after work and then a 4 hour chunk each weekend day. DONT - AND I MEAN DONT - spend all weekend sitting inside. It will depress the crap out of you and you will burn out. Get outside, enjoy yourself, do things you love and don't ignore your family and friends. If you stick to your schedule, you can balance everything.

4. I tried index cards and they didn’t work. Plus, by the end of each book, I had a stack of cards I couldn’t fit in my bag. Instead, I used blank pieces of paper and wrote pertinent formulas on them in a long list. I also found it was helpful to jot down pertinent terms. Once I completed a topic, I stapled them together. You will find that the same formulas appear throughout the books. Then, I reviewed these in my car on the drive to work in the AM while I was awake. Don’t leave memorization to the last minute – I found myself cramming a bit on these.

5. Don’t leave Ethics for the end! I was given this advice and ignored it. It is among the most important topics, and you are better reading it while you are fresh to the program vs. 3 months into studying. I found it required minimal review at the end. I also recommend reading the Ethics section in the CFA text vs. Schweser. I also used the CFA Handbook practice questions as a test.

6. Don’t get bogged down on material (particularly Quant) – you don’t need to be an expert on all that stuff. Given the number of questions you can be asked (per the weighting scheme on the CFA website), put that into context with the hundreds of formulas they throw at you in the Quant section alone. Some topics are obviously much more critical than others like TVM (because it reappears in FI , Equity, Corporate Finance). Be smart with your time! If you don’t understand and it doesn’t reappear frequently in practice questions, forget it. If it isn’t clear in Schweser, try reading the CFA text.

7. Take some form of review class! Look at your local CFA society as they all offer review courses for a reasonable sum of money. Paying for a Schweser review class seems a bit repetitive – it is much more helpful to get a different perspective. The key is to have all the reading done before the review as a true test of your knowledge.

8. UNDERSTAND THAT YOU CANT KNOW EVERYTHING!! This frustrated me but I finalized gave in. Some of the minutia you will be presented with is worthless. Nobody can remember all of the material. The key is to understand the key concepts.

9. Realize that your life will suck for 6 months. I pushed myself too hard and burned out late in the game. Stick to your study plan and you will be fine. Take a day or 2 off per week, but try to maintain consistency in your routine so material remains fresh.

10. Try to avoid reading the Analyst Forum daily. I found it stressed me out because 2 days after I began studying, people were posting that they were already done with the reading. It isn’t a race, and everyone learns differently. The test measures your ability to comprehend and apply the material.

I wish you luck in your studies. I passed the test while balancing work and my family so it can be done and I’m sure you can too if you put in the time and effort. It wasn’t easy but it was satisfying when I found out I passed.




The three columns on the right are marked with asterisks to indicate your performance on each topic area.

Multiple Choice Q# Topic Max Pts <=50% 51%-70% >70%
- Alternative Investments 8 - - *
- Corporate Finance 20 - - *
- Derivatives 12 - - *
- Economics 24 - - *
- Equity Investments 24 - - *
- Ethical & Professional Standards 36 - - *
- Financial Reporting & Analysis 48 - - *
- Fixed Income Investments 28 - - *
- Portfolio Management 12 - - *
- Quantitative Methods 28 - - *

NakedPuts00

I think the best tip for the Level 1 exam is do as many practice questions as you can. Therefore, I would say get your hands on as many practice questions and mock exams as possible.
More to the point, the secret is not just doing the questions but the time spent on marking the answers.

What I mean by this is don't cut any corners when you are grading your paper. For every question you should make a real effort to understand the answer. It's not enough just to see that you have the answer right and then move onto the next question (unless you truly understand the answer). That goes for all sections apart from Ethics, I think that can be very subjective so don't get too bogged down with it.
If your answer is incorrect (or you have guessed it correctly) you should spend a few minutes reading up and around the answer. This can be quite annoying at first because it is very time consuming (if you are doing a 3 hour exam, then it'll take 3 hours to mark it properly too) but as time goes on you'll see repetition in the questions and will be able to do them much faster.

I think it's natural to enter the revision period leading up to the exam feeling that you have forgotten much of the material that you studied at the beginning of the year. But again, if you do enough questions then you'll cover the material at some point.

My entire revision for the Level 1 exam consisted of doing Qbank, EOC and mock exams. I studied from the official CFAI notes and didn't use any third party notes. I used a highlighter pen on the notes first pass through but I found that I didn't even go through them a second time, I let the entire revision process be guided by the practice questions.

I passed L1 in June and came out of the exam feeling pretty confident.

anothercfainnyc

Thank you, good tips.

transferpricing

Hi,

Here is where I struggle . . . I've read the materials but I'm finding it very difficult to keep previously read topics current. I'm trying to do a few questions but seem to be more focused on finishing the material. I don't want to wait till my last month to revise everything so I need to start revision in increments, way before November (taking test Dec 2011). Any thoughts on how to retain previously read materials? What can I do daily or weekly?

dvilayphet

I'll echo that everyone is different- I finished 70%+ in all areas and prob was unorthodox in my method in my method/time frame.

Got material feb 18. Read books cover to cover, did all EOCs immediately after reading chapter, took ton of notes. Finished reading about last week in April (set benchmarks at start to stay on track). Took early may live mock in philly.

Left about a month for extra mocks (usually one on a wknd), and for distilling notes/working on week areas. Did ~150 ethics questions in last week.

AndyNZ

everyone is different. i left ethics for the end for levels 1 and 2 and excelled in it. again, everyone is different, but it was kind of you to inform candidates what worked for you.

cv4cfa

OP,

You seems to be very experienced and a nice person. Any chance we can exchange emails as I would like to take some tips from you.

Regards

adehbone

I put all the notes and text books under my pillow. And I woke up one day in July found an email saying: Congradualation, You Pass!

anothercfainnyc

BC did you go to every class? I attended every class but one (missed portfolio management), I would recognize the diehards, just wondering if you were one of them.

BC_MBA_student Wrote:
-------------------------------------------------------
> I thought I would share my experience with anyone
> interested on how I passed the Level 1 Exam this
> past June on my first try. In addition, I achieved
> >70% across all categories so I feel I knew the
> material. See below for my "pearls of wisdom" and
> recognize that everyone starts from a different
> point based on background and experience.
>
> My background: graduated with a MBA and a
> concentration in asset management. I took classes
> in financial statement analysis, accounting,
> statistics, fundamental analysis, portfolio
> management, economics, investments, derivatives
> and risk management and venture capital. I
> graduated top of my class (because I was willing
> to work harder than my peers). I have worked in
> the financial services industry for 11 years, and
> roughly 5 years of that in an investment
> decision-making role with my most recent role as
> an equity analyst for a RIA.
>
> My experience: I initially began studying the
> first week of January with the intention to read
> all of the CFAI text. I began highlighting in book
> 1 and taking notes. I got bogged down in the
> material (despite spending significant amounts of
> time studying) and felt that the Quant Methods was
> incredibly boring and somewhat confusing. At the
> end of February (almost 2 months of work), I
> finally finished book 1 and began book 2
> (Economics). At this point, I realized I would
> never finish in time. I reassessed my options and
> decided to order the Schweser text. I was able to
> complete all of the Schweser texts in about 2
> months and was able to begin reviewing by early
> May. I spent the last month reviewing my formula
> sheets, redoing practice problems from various
> chapters and taking a few practice exams. I also
> took a review class with the Boston Security
> Analyst Society which I felt was excellent and
> helped reinforce information (particularly Fixed
> Income). My final 3 weeks of review were scattered
> at best as I felt like I had burned out, was
> balancing work/studying and a 5 month old baby,
> and truthfully had lost some drive. I spent my
> final day before the exam studying for a couple
> hours and then watched TV.
>
> My secrets to passing:
> 1. Obtain the Schweser texts and use these as your
> primary source of material. After reading each
> chapter, do the problems and then skim through the
> CFAI corresponding chapter to make sure nothing is
> missed (only found a few discrepancies). Do the
> CFAI EOC questions as the CFA problems may test
> concepts differently. I thought this helped to
> reinforce concepts. I found this particularly true
> in some parts of equity analysis and portfolio
> management.
>
> 2. DO THE EOC PROBLEMS AT THE END OF EACH CHAPTER:
> I know I already said this but it is very
> important. It is not enough to just read the
> text.
>
> 3. Print a hard copy of your calendar covering
> your studying start date to the exam date. Count
> the number of pages you need to read in the
> Schweser text. Then divide this figure by the
> number of weeks you will study (leave 2-3 weeks to
> review). Now you have your weekly reading total.
> Then, mark on your calendar which days each week
> you will study and how many pages per day. This
> seems tedious but it gave me the confidence that I
> would finish in time and kept me on track. I
> focused on 1 hour before work, studying during my
> lunch, doing a few hours after work and then a 4
> hour chunk each weekend day. DONT - AND I MEAN
> DONT - spend all weekend sitting inside. It will
> depress the crap out of you and you will burn out.
> Get outside, enjoy yourself, do things you love
> and don't ignore your family and friends. If you
> stick to your schedule, you can balance
> everything.
>
> 4. I tried index cards and they didn’t work. Plus,
> by the end of each book, I had a stack of cards I
> couldn’t fit in my bag. Instead, I used blank
> pieces of paper and wrote pertinent formulas on
> them in a long list. I also found it was helpful
> to jot down pertinent terms. Once I completed a
> topic, I stapled them together. You will find that
> the same formulas appear throughout the books.
> Then, I reviewed these in my car on the drive to
> work in the AM while I was awake. Don’t leave
> memorization to the last minute – I found myself
> cramming a bit on these.
>
> 5. Don’t leave Ethics for the end! I was given
> this advice and ignored it. It is among the most
> important topics, and you are better reading it
> while you are fresh to the program vs. 3 months
> into studying. I found it required minimal review
> at the end. I also recommend reading the Ethics
> section in the CFA text vs. Schweser. I also used
> the CFA Handbook practice questions as a test.
>
> 6. Don’t get bogged down on material (particularly
> Quant) – you don’t need to be an expert on all
> that stuff. Given the number of questions you can
> be asked (per the weighting scheme on the CFA
> website), put that into context with the hundreds
> of formulas they throw at you in the Quant section
> alone. Some topics are obviously much more
> critical than others like TVM (because it
> reappears in FI , Equity, Corporate Finance). Be
> smart with your time! If you don’t understand and
> it doesn’t reappear frequently in practice
> questions, forget it. If it isn’t clear in
> Schweser, try reading the CFA text.
>
> 7. Take some form of review class! Look at your
> local CFA society as they all offer review courses
> for a reasonable sum of money. Paying for a
> Schweser review class seems a bit repetitive – it
> is much more helpful to get a different
> perspective. The key is to have all the reading
> done before the review as a true test of your
> knowledge.
>
> 8. UNDERSTAND THAT YOU CANT KNOW EVERYTHING!! This
> frustrated me but I finalized gave in. Some of the
> minutia you will be presented with is worthless.
> Nobody can remember all of the material. The key
> is to understand the key concepts.
>
> 9. Realize that your life will suck for 6 months.
> I pushed myself too hard and burned out late in
> the game. Stick to your study plan and you will be
> fine. Take a day or 2 off per week, but try to
> maintain consistency in your routine so material
> remains fresh.
>
> 10. Try to avoid reading the Analyst Forum daily.
> I found it stressed me out because 2 days after I
> began studying, people were posting that they were
> already done with the reading. It isn’t a race,
> and everyone learns differently. The test measures
> your ability to comprehend and apply the
> material.
>
> I wish you luck in your studies. I passed the test
> while balancing work and my family so it can be
> done and I’m sure you can too if you put in the
> time and effort. It wasn’t easy but it was
> satisfying when I found out I passed.
>
>
>
>
> The three columns on the right are marked with
> asterisks to indicate your performance on each
> topic area.
>
> Multiple Choice Q# Topic Max Pts <=50% 51%-70%
> >70%
> - Alternative Investments 8 - - *
> - Corporate Finance 20 - - *
> - Derivatives 12 - - *
> - Economics 24 - - *
> - Equity Investments 24 - - *
> - Ethical & Professional Standards 36 - - *
> - Financial Reporting & Analysis 48 - - *
> - Fixed Income Investments 28 - - *
> - Portfolio Management 12 - - *
> - Quantitative Methods 28 - - *

lucasg85

I will add my experience as well!
I passed CFA Level 1 exam in my first attempt. I got over 70 in QM, FI and PM. Rest all are in 51-70% range. It's not an awesome score; so I will like to provide some tips (incl. how I could have performed better).

My background: Math major - never took finance or accounting classes.

QM was easy for me since I knew most of the stuff. But all other material was completely new. I studied from Schweser solely - and did just 0.5 CFAI mock, 0.5 Free Elan mock and 2.5 Schweser mocks. I never did any EOC questions from CFAI books - I never touched them! I started studying in March, but May was when I studied regularly.

Some mistakes I did and how I could have improved/Tips for re-takers and first-timers:
1. Notes are good - I doubt the provided matters much for Level 1. But don't skip CFAI EOC questions. Many people swear by EOC problems. I never used the CFAI books, so can't comment on them.
2. Do the CFAI mock seriously - I feel they were closest to the real exam in terms of difficulty level. I should have taken it seriously.
3. Start early - everyone says that, but it really helps!
4. Don't skip any topics - I skipped huge chunks either because I thought I will never get it, or because I found it not so important. I was surprised that a lot of not-so-important stuff does show up on the exam.
5. Don't try to be 'smart' when studying - focus on all topics. Although you don't need to pass in every section to pass the actual test, don't neglect any topics.
6. Practice some other problems as well - besides just EOC. You may not need to finish all problems from the various questionbanks out there, but try to solve a good number until you feel confident.
7. Start taking mocks/practice exams at least 3 weeks prior to the actual exam. I took mocks only in the last week - bad idea.
8. Take mocks under exam conditions i.e. do a 3-hour session, take a 2-hour break and continue with the next 3-hour session. Most of the candidates I spoke to after the exam found the exam way too stressful, and were tired. I was really exhausted during the afternoon session of the real exam and just wanted to get done with it!
9. Prepare a schedule, provide some flexibility for unforeseen events, and stick to the schedule. Don't have an over-ambitious schedule, because if you fail to stick to it, you may lose hope.
10. Don't lose hope. People ask if the exam is 'do'able. Of course it is! So many people have the charter, an even greater number have passed level 1. And there is a high possibility that whatever educational/work background you have, someone earlier must have been in a similar situation and passed. So, it is definitely possible. I had no background in finance, but still managed to pass.
11. Ethics is important. People focus on the standards, but don't neglect GIPS!

Good luck!