The following 3 questions will pretty much predict if your CFA® level 1 exam plan is going to succeed or not, if you answer them honestly.
- What are your reasons to succeed? (You need these to be strong enough to pull you through when the going gets tough).
- Can you realistically commit in excess of 300 hours preparing for the test? (If you have a strong academic and professional background in finance and English is your mother tongue you might not need far in excess of 300 hours, but you improve your odds with every additional productive hour employed).
- Do you have a clear and time tested strategy for what to do with your study time? (This is probably the hardest one for most. If you are just planning to read through the curriculum without a strategy, that is a very inefficient use of your study time. It might still be enough to pass, but there are little tweaks to your approach that will make a world of difference. You don’t need a complicated plan, just a set of effective concepts that you stick to).
1. Reasons to succeed.
Way too many candidates set out to study for CFA® level 1 exam without clear reasons why they must succeed. Completing this program will require 1,000 hours+ of intense focus. If you are 100% determined that you want to progress your career as a portfolio manager or investment analyst this will probably be time very well invested in your own future, but if not I would spend a lot more time considering my options. Think about what other skills and qualifications you could acquire in 1,000 hours.
2. Time Management
It is very common for candidates to overestimate how much time they are realistically able to commit to the program. I frequently receive emails from candidates claiming they will allocate 20 hours a week to their studies and a couple of weeks down the line they have made hardly any progress on their studies. Work, family, friends, vacations, disease and a long list of unique personal issues are all examples of things that might potentially get in the way of our best intentions. The only way to deal with this is to build in extra time in your study plan. If you think you need 350 hours, aim to set aside 400 or even 450. Then you are able to keep up with your study plan even when unforeseen distractions show up.
3. CFA® level 1 exam plan
You only need to embrace a few key distinctions to set yourself aside from the competition. (1) question practice, (2) flash cards and (3) LOS (Learning Outcome Statement) focus.
Passive/Active Learning
Reading and watching videos might feel a lot more comfortable than engaging with the activities above, and while these styles of “passive learning” have their place providing you with a quick grounding on the topics covered, you should spend more than half your time in “active learning” mode, creating/revising flashcards and practising questions.
Mock Exams
I would recommend allocating time for a monthly mocks exam replicating the exam conditions as closely as possible throughout your study program. Even though you might perform abysmally at first it will provide you with crucial game training. You can’t expect to walk on an American football pitch having only read a theory book, you will get yourself killed. Similarly you cannot show up at the CFA® level 1 exam without “game training” and expect to do well. If you practice replicating the exam conditions several times before the actual exam you will improve your odds significantly.
End of Chapter Questions
I also recommend completing all of the end of chapter questions as you move through the curriculum making a note of the questions that you find difficult and/or answer incorrectly. Redo the difficult questions as many times as required until you have mastered them and really understood the concepts. Keep the list of difficult questions handy for your revision later. If you run out of questions by all means buy a question bank, but many candidates never even spend the time to thoroughly master the questions in the curriculum.
Flashcards
Create Flashcards with all significant formulas and LOS, as you move through the curriculum. Use these Flashcards to practice whenever you are commuting or need a break away from your regular studying.
Ethics
Lastly, I recommend all candidates spend a disproportionate amount of their study time on Ethics. This topic has got by far the most favourable relationship between its modest size in the curriculum and significant impact on your exam grade.
Studying for the CFA® level 1 exam is hard work, there is no way to sugar coat it. It is however the same for everyone, and this is precisely one of the reasons why the CFA charter is so well regarded. The only thing worse than studying hard to pass the CFA level 1 exam, is to study hard and fail. If you follow the recommendations above you will meaningfully improve your odds of success.
Best of luck.
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