I recently received a question from Steve Sivak of Innovate Wealth: How do I pass the CFA Level 1 Exam? When I sat down to type my response, it turned into a lot more than I was expecting. Below are the thoughts I shared with him. I don’t have any breakthrough secrets here. It’s mainly just through pain and anguish. But with it being the time that most people begin studying for the exam, here’s an outline for what my plan was on level 1 of the CFA exam (and what is my plan to study for the level 2 exam).
Create a Study Calendar
First, create a study calendar for yourself. If you purchased an exam prep course, most of them will give you an estimate on how long each chapter reading or quiz can be expected to take. Use that information to fill in your study calendar(1) with each day you are studying and what section/quiz you will be doing. (2) The point is that this will give you a good estimate on where you need to be at any given time in terms of covering the material. It’s very easy to let two weeks pass and tell yourself you’re on pace if you don’t know what the pace is. The study calendar should end about 3.5 weeks before the exam. This will be the time you begin taking practice exams (covered in more detail later in this post).
You’ll likely fall behind pace at times and have to find extra time to catch back up. When you catch back up, work your absolute hardest to put yourself ahead of pace. You never know when an illness or something is going to come along and make it difficult to study and cause you to fall back. It’s something I learned in my rowing career. When times were good, I needed to work as hard as could and maximize my time. There was always an inevitable injury or illness coming that was going to damage my training. If I wanted to guarantee I won a race, I needed to make my worst be better than other people’s best. Otherwise, I was bringing an element of luck into play.
How to Study Each Section of the CFA Exam Test Prep
Don’t worry about going back and restudying the sections. That will come at the end. The key is to make sure you understand the material when you are covering that section.
…But don’t lie to yourself! Understanding the material means you can wake up the next morning after studying and get all of the questions (or the large majority) in the quiz from that section right without cheating. Do that for each chapter and overall section review (for example, that means the individual quant chapters, and then the whole quant section quiz at the end of the book). Then you move on to the next chapter or section.
Do that all the way through every chapter. Don’t worry about going back and doing the quant section after you finish the fixed income section (as an example). As long as you’re ensuring you know each section as you go, you’ll be fine. Circling back will come later.
Then with no less than 3 weeks to go, you should be through ALL of the individual sections (except Ethics. You will save this to do about a week before. and only do for one or two days. I’ll get back to this.).
3.5 weeks to go before the exam
Take a day or two and go through questions from each chapter that you thought were the hardest to refresh your memory a little bit. Then take your first half exam. You’re going to get wrecked by this exam. You’re going to know you’re getting wrecked as you go through the exam. Keep going as you’re taking it (I actually wanted to quit halfway through because of how much I knew I was getting throttled). The goal is simply to get a 45-50 on it. So you’re shooting to get every other question wrong. You can do that!
Once you’re done, take two days reviewing the questions you got wrong and going back and redoing those questions (don’t worry about reading anymore. Just be doing questions you got wrong). For me, I mapped it out so that after each practice exam I would only focus on ONE topic to review and try to drive that section’s score higher for the next practice exam. I felt this really helped me refresh on a section and know it deeper, rather than trying to cover every single topic area I got questions wrong on the practice exam.
Preparing to take the CFA exam is like plugging a leaking a boat. You’re merely trying to cover up enough holes in the ship to prevent it from sinking. You can’t cover all of them, so pick the biggest ones, and make sure you really secured them.
After you’ve done that, take another half exam. Spend two days going back and redoing all the questions you got wrong (and truly understanding them/being able to repeat them without cheating). Then take another half exam –> 2 days reviewing –> Take a half exam –> Review for two days.
Now you’ve completed two full tests. Your score will have rose on them (possibly not in a straight line, but the trend will be up). Now take a Saturday and do a full test. Both halves. Now you’ve done three full exams. Spend two or three days reviewing/correcting/working. Then take as many half exams as you can, with a day or two in between to re-learn what you got wrong, with the time you have left.
For me, I took 4.5 exams in total before the exam. My goal was to do six. I never scored higher than a 68 average on the two halves. I had some halves that I scored like a 76 on or so, but the average of the two halves was never higher than a 68. It was extremely frustrating. I’d be so pumped to score the 76,
With one week to go (Sunday/Monday week of the exam), spend two days doing ethics questions. This is your last minute jet fuel. Saving Ethics for last helped me stay positive when my scores weren’t where I wanted them because I knew I could pick up some last minute points there.
Lastly, take a full exam on Tuesday (the week of the exam). Spend Wednesday and Thursday redoing the questions and truly understanding the questions. Doing that, you’ve picked up even more points from whatever your last score was on Tuesday. Friday, you can review some Ethics to occupy yourself. I did that and reviewed one question that I really wasn’t good at, figuring that just maybe I’d get lucky and I’d be pick up a half point on the exam.
Callous Your Mind
The studying never gets easy, but it does get easier. As David Goggins says, you need to callous your mind. When you’re starting out, it’ll likely be difficult to focus for more than 15 minutes at a time because (if you’re like me) you haven’t studied in quite some time. Stick with it and you’ll continue to callous your mind to make it tougher and tougher.(3)
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References [ + ]
|1.||↑||I use a physical calendar, but a digital calendar works just as well|
|2.||↑|| if you are just using the material given to you by the CFA Institute for Level 1, you’re going to have to do your best to estimate. Don’t stress too hard if you have to estimate. The point is just to be in the right ballpark anyway. Some sections the study prep say they will take 18 minutes to review, but they end up |
|3.||↑||And as a last side note, they talk about smart beta in level 1 material, but just know that it is dead.|