Muschamp Rd

Passed All 3 CFA® Exams

August 30th, 2018
Passed CFA Level 3 Exam

I honestly am not sure how to best approach writing this blog post. It took me a long time to pass all three CFA® exams, most people who start the program do not finish it successfully. When I wrote it, I had not finished the program successfully. I do not get to add three letters after my name or hang anything on a wall until I complete the work experience requirement. There are very specific rules to updating your resume not to mention social media. Considering everything I have already written and already gone through during my time as a CFA Candidate, I’m just not sure what more I should say.

It took me several attempts to pass Level 1 and Level 2, but I passed the CFA Level 3 exam on my first attempt. I felt the best after this exam, I had a lot of health problems to deal with over the years, something I probably should not be mentioning considering I was actively looking for a new job, but the CFA program is very challenging, it is even harder when you are not at your best. Last year I had emergency surgery about 3.5 weeks before the exam. I vaguely remember lying in the hospital bed studying the flashcards I made on my iPhone.

My surgery was fairly minor, infected gallbladder removal, but it was painful and problematic given the exam date or I would not have finally gone to the emergency room. For this surgery, they feed you intravenously and put you on morphine and who knows what else. After a while your veins get overwhelmed as do your nerves so your hand goes numb, then they switch arms so you’re left with two numb hands and you can’t even scroll on your iPhone anymore. So after getting up and walking out of the hospital, I still had to suck it up and study and write the six hour exam a few days later, I was definitely not at my best. Others have undoubtably had it worse there are exam horror stories aplenty online.

I passed the Level 2 exam despite emergency surgery, others have overcome worse. For level 3 I just had to deal with a recurring knee injury and the resulting weight gain. I got a test centre a few metro stops from my apartment. I was able to leverage study materials I’d already made. I started early. I studied every day I possibly could, every weekend, every statutory holiday. I even studied during the company’s annual party. I still would have liked two more weeks to practice and review. You can read numerous CFA triumphs and failures online, often they are semi-annoymous. You can benefit by reading these before you become a CFA Candidate as once you register your free time becomes extremely limited.

Why do people do the CFA program?

The modern job market is very competitive. The CFA Institute will tell you the charter is the worldwide industry standard so every year thousands sign up to write the exams, most fail. Here is an interactive chart made by Charles McGrath if you want to see the data visualized. Even that doesn’t give the full picture as people who register but do not actually sit the exam are not counted as failures. If you scour the Internet you’ll see even more depressing numbers than the official CFA Institute data. If you count “no shows” as unsuccessful examinees the estimated pass rate falls to the mid thirties. Even more depressing is the estimated number of candidates who actually successfully finish the program after registering, it is estimated that only one in five people who start the CFA program finishes successfully.

This has lead to an entire industry of test preparation providers. I largely studied alone using the official materials and materials I made myself. The materials I made myself must have been good as people kept stealing them and claiming them as their intellectual property. There is other free study material online and numerous forums where the quality of the assistance varies as does the civility. As the number of candidates increased so too did the competition to pass, this has lead to cheating, plagarization, and numerous candidates being caught and punished. In addition to finance, accounting, economics, and statistics, the CFA Program includes ethics along with a Code of Standards that is not optional and likely contributes to reducing the number of candidates who successfully complete the program.

How much does it cost?

Business Insider is publishing as of August 2018 the cost of the CFA Program as 2500 US dollars. In this same article they note such facts as over 100,000 candidates failing an exam this year (so far) plus the fact only one in five actually finishing the program once they start. How can they stick to their 2500 dollar estimated cost knowing anything about probabilities and weighted averages?

First let’s assume you’re an average candidate and have to retake at least one exam, that adds a couple hundred dollars to the cost of completing the program, but the biggest cost is not tuition. Some lucky few get their exam fees paid for by an employer, the employer may even cough up a couple thousand dollars more per level for a prep course. The average candidate pays out of pocket with the hope of recouping these cash expenses later in their career. ROI is more important than initial cash outlay.

The biggest CFA Program cost is opportunity cost.

Let’s assume you only study 300 hours per exam and let’s assume you pass all three exams on your first attempt. Let’s further assume your time is worth $100 dollars per hour which you could have been earning by “consulting”. That means the opportunity cost is at least $90,000. Now consider you actually fail an exam or you need to study more than 300 hours. Also consider the possibility you may value your leisure time at more than $100. You will have to give up hobbies, family time, TV, movies, reading for pleasure, going out, playing sports, exercise, who knows what in order to fit in hundreds of hours of studying. Even if you only value your free time at $10 an hour that still increases the total cost of the CFA program by at least $9000 when you consider opportunity cost.

Even if you’re still confident you’ll pass everything on your first attempt and that you have no need of prep classes, or third party study materials, and you have unlimited free time because you have no job, no family, no significant other, no hobbies, no church commitments, no desire to bathe or shave, you’re forgetting the cost of coffee. I drank a lot of coffee studying for the CFA Program.

In Conclusion

I don’t want to be the Debbie Downer of CFAlandia. I was relieved I finally passed Level 2 and probably should have passed the year before. I’m just too stubborn, so I pressed on and passed Level 3 the year after that. I took a break after passing the first exam. I’m not sure when I’ll have a positive ROI. The CFA Program seems to impress random people on social media even the odd coworker, but my then current employer gave me nothing: no promotion, no bonus, no extra days off. So I kept working my shift and applying for jobs. It took me many months and hundreds of applications not to mention relocating to find a new job. But, if you still think you’re an unique and beautiful snowflake who can study a couple weeks and ace the CFA exam three years in a row with zero possibility of anything going wrong in your life for the next three years, plus you have $2500 US dollars burning a hole in you pocket and you meet the actual requirements, you too can become a CFA Candidate.

I’ve collected a lot of resources for Level 3 but most famously of all I gave away Level 1 study materials for free. Perhaps Level 2 is best thought of as the Long Winter. I wish you good fortune in the wars to come.



  • Muskie says:

    This has now become the biggest spam magnet on my website, so if you really want to contact me with a comment you’ll figure out how, but I’m going to close comments.

  • Muskie says:

    2020 definitely dissuaded all CFA Candidates that they are “unique and beautiful snowflake who can study a couple weeks and ace the CFA exam three years in a row with zero possibility of anything going wrong in their life”. It is an expensive but valuable lesson to learn. Hopefully these candidates actually studied and are well prepared for 2021 when exams go digital and become more pandemic proof. It was a crazy year on the market if you were not yet in the industry, with major US indices ending at or near record highs. 2021 likely will not be so volatile.

    • Muskie says:

      2021’s recent CFA Level 1 results, the lowest passing average in the history of the exam, may dissuade even more CFA Candidates and potential CFA Candidates from thinking they are “unique and beautiful snowflakes who can study a couple weeks and ace the CFA exam three years in a row”. There are various theories involving Covid, exam cancellations, and the switch to computer based testing, combined with complaints from Charterholders about devaluing the Charter as to why the MPS was so high. You can’t believe everything you read online, but clearly more Candidates should have read this blog post. I definitely tell people it is harder than they think and the likelihood of passing and finishing the program is low. Level 3 results supposedly come out on August 10th, we’ll see who feels like celebrating then.

      • Muskie says:

        Clearly CFA Candidates have stopped reading this blog. There are a lot more CFA Program materials and coverage now than in the olden days. My collection of flash cards is also considerably less popular. If people have been reading Twitter, or reddit, or Bloomberg instead of Muskblog they would know CFA Level 1 pass rates plunged to a new all time low for test takers in July 2021. That is right just 22% passed proving again the fallacy they are “unique and beautiful snowflakes who can study a couple week and ace the CFA exam three years in a row”.

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