Following a thread initiated by Greenman (and a suggestion by Quest), I will give below some advice on how to pass the CFA level 1 in less than 30 days, all based on my experience (level 1 passed in December 2012, in 15 days, with a full-time job). There was a guy (pseudo Bleron) who claimed he did the same in 2006, I’ll try to be more specific than him.
This first post is a caveat about who is really able to shortcut the preparation. The second post will be about the method I used.
So, before you think “Hurrah, this will help me pass the June 2014 exam even though I have not even started reading”, let me be clear: The same way the CFA is not for everybody (some people lacking the core skills would never make it), preparing the CFA level 1 in less than a month is not for every level 1 candidate.
Also, please note this works well for CFA1 because the exam only aims at testing that you know the stuff and that you can apply it. It’s a lot of subjects but it’s absolutely straightforward, unlike level 2 and 3 which aim at selecting a fraction of the candidates (so they trick you with lots of details and subtilities).
Here are the 3 cumulative conditions to decide if you’re part of the subset of candidates who can prepare in less than 100 hours:
- You’re solid at math
- You already understand (I mean, really understand) the mechanics of Cash flows in financial statements and NPV
- You can handle stress
To test 1/ solid at math, I propose this litmus test: With just pen and paper, you can find in less than 5 minutes the 10 unknowns of 10 linear equations with integer coefficients, without mistake, and you find it easy and boring. Typically, you’re a (good) engineer or you graduated from some applied math curriculum.
To test 2/, your understanding of cash flows in financial statement and NPV, is a bit more tricky. It has nothing to do about your knowledge of accounting (I’ve known CPAs who don’t really get it), instead some business experience helps. In my case I had produced many sophisticated business plans for companies or projects, and as an engineer I tinkered with the concepts to understand their mechanic.
To build on my case, before I studied for level 1, here’s what I knew:
- in Income statements I could immediately visualize and care for the cash lines only
- I didn’t care about Balance Sheets, only about the lines representing real cash (like inventory, debt).
- I could explain why IRR is dangerous to use instead of NPV.
As for 3, your capacity to handle stress, you have to know yourself. If you went through many competitive examinations in your student years (like, 10,000 candidates for 400 positions), you probably know. They are a few other activities that can tell: free-diving, flying aircrafts. To some extent skydiving too, but it’s only for a few seconds, while the other examples (and the CFA exam) require that you can use your stress to keep your focus over several hours, and fight over every single question till the very end.