In January 2017, I found out that I passed the 2016 December CFA Level I exam. The results email arrived shortly after 3am my time, and I’m fairly confident that my excited/relieved screams woke up everyone in my building. Why the excitement? Out of the nearly 60,000 candidates who sat for the exam, only 43% of them passed, which means that 57% (roughly 34,000 people) are left wondering what they did wrong. People contact me for advice often, so I figured I might as well share my process here.
What is "CFA"?
CFA stands for Chartered Financial Analyst. The CFA® designation is a well-respected, globally recognized financial credential. To become a charterholder, you have to successfully pass three intense investment-related examinations and have four years of experience in the investment decision-making world. Everyone has their own motivations for trying to become a CFA® charterholder. For me, it’s mostly about formal finance training, credibility, and my future plans for ReisUP. While I have four years of experience as a hedge fund analyst, I don’t have a finance degree or an MBA. I feel that obtaining the CFA® designation and all the knowledge that comes with it will make me a better analyst and business owner.
Let me preface the rest of this post with the following:
I’m a fast learner and pretty good test-taker, historically speaking.
I’ve always used this sort of "funnel method" (broad to condensed) to study for things. It’s time-consuming, but has yet to fail me.
My job allowed me to multitask to the max, so I was able to study while working.
I did not intend to study for only one month. I initially planned for three, but life, business, and CFP® coursework took priority in Sept/Oct 2016.
November was not fun. Cramming the entire curriculum into just one month made for a grueling and utterly exhausting experience that left me practically dead to the world for about a week afterward. It also meant that I was completely MIA socially.
I am in no way recommending that anyone study for just one month. However, if life gets in the way and a month is all you have, here’s living proof that it can be done.
HOW WELL DID I DO?
The CFA Institute doesn’t release actual scores or the minimum passing score, but they do tell you which score range you achieved per topic. Scores are broken into three ranges:
Less than or equal to 50%
51% to 70%
Greater than 70%
I scored over 70% in all topics except for two: Fixed Income and Quantitative Methods. I landed in the 51% to 70% range for both. That wasn’t surprising given a) those were my weaker subjects while studying and b) I ran out of time in the PM portion and was forced to guess on a few questions that I had intended to go back to.
Why I DIDN’T purchase any third party cfa prep materials?
Well that’s kind of a lie - I bought the Schweser QuickSheet two weeks before the exam. But that’s it. Nothing else. The CFAI says you’re responsible for and could be tested on any of the information in the Candidate Body of Knowledge (CBOK), and since the CFAI puts on the exam, I figured I was best off studying the materials they provide. I’m also the type of person that can’t confidently take an exam unless I know I've covered all of the testable info (call me paranoid). Reviews of some prep providers made me wonder whether they adequately emphasize certain concepts, and I wasn’t willing to take any chances.
Long story short, I didn’t see any reason to pay $1,000+ for extra exam prep when I had already paid $150 at registration for the ebooks. I'm not into shortcuts, especially pricey ones. Spending tons of money won’t help you pass; dedicating adequate time and effort to the CBOK will.
how TO PASS THE CFA LEVEL I EXAM
Here’s the exact step-by-step process I followed. If you’re serious about studying and passing the exam, I highly recommend it.
Step 1: Print out a blank calendar
You can find these all over the internet. I initially printed out ones for September, October, and November, but only really ended up using the November one.
Step 2: Divide the reading material into pages per day
Divvy up the number of pages to read by the number of days you have left until the exam (leaving a week or two for review and mock exams). Then go through the curriculum and write down which pages/readings you’re going to do each day on your calendar. For reference, I was reading anywhere from 150-350 pages daily to get through the material in time. (I was even reading on the app while doing cardio at the gym!) Combined with practice questions, that translated to about 10 hours of study per day.
Step 3: Read through the curriculum and take notes
3,000+ pages is painful, but you’ve got to do it. I read through all of the material and took notes where necessary, even if it was just a one-word reminder. Make sure to go through the example problems in blue boxes too. They break down concepts into digestible steps and are representative of the types of questions you may see on the exam.
Step 4: Do the End-of-Chapter questions (aka "EOCs")
I did these questions immediately after completing each reading to make sure I had retained what I read and could apply it.
Step 5: create a study guide for each topic
After finishing all of the readings, go back through your notes and create a study guide for each topic. I’m the kind of person that has to write something down a few times in order for it to sink in. So going through my notes and forcing myself to distill them down to only the most important concepts and formulas was critical to my success. I used plain white printer paper to create these and organized the guides by reading for structure. You can get a glimpse of these bad boys in this blog’s image and on ReisUP’s Instagram page.
Step 6: Do the EOCs again
That’s right, do the EOCs again after you've made a study guide for the entire topic. (I did them at least twice total, three times in some cases.) After creating the study guide, the information was fresh in my mind. It was a great way to gauge which concepts I knew well, and which ones I needed to focus on a bit more. Definitely recommend multiple passes through the EOCs.
Step 7: attack the topic tests individually
After creating a study guide for one particular topic and redoing its EOCs, I then took that subject's topic test. The topic tests are far and away what prepared me best for the actual exam. You can find them in the Candidate Resources section of your CFAI account. The Institute gives them to you for a reason - use them! Make note of any questions/concepts you get wrong and make sure to study those a bit more.
For reference, I got 80% to 95% on most topic tests except Econ (60%), Financial Reporting (70%), and Alternatives (70%) the first time around.
Step 8: take one or more mock exams
After you've made your study guides, gone through the EOCs again, and completed each of the topic tests, take a practice exam or two. I only took one mock exam the day before the actual test. I would have liked to take more, but time didn’t permit.
Step 9: The night before, check-in with yourself
I did this in two ways. First, I retook the topic tests, but only did the questions I got wrong the first time around. Second, I made a list per topic of concepts I felt a bit shaky on and needed to look at last minute. Once I was confident I had that concept down, I crossed it off. If there was a formula or something I knew I would need to glance at right before the exam, I put it on a flashcard.
Step 10: on exam day, Trust that you’ve prepared well
While walking to the testing center on exam day, I flipped through the short stack of flashcards I made the night before. There were only a handful, but they contained a few formulas I hadn’t spent all that much time on, mainly because they didn’t show up much in the EOCs. (Lucky I did, because they showed up on the exam!) Other than that, I listened to some tunes to get pumped up, then marched confidently into the exam hall.
MOVING ON TO level II?
Click here to learn how I passed the CFA Level II Exam in just over one month, what I wished I would have done differently, and my top tips to help you pass Level 2 on the first try.