When should you start working toward your CFA designation? You can start your CFA Level 1 prep before you graduate college. But, many (the majority that I’ve seen) start after entering the working world. In this post, I’m going to cover the pluses and minuses of studying for the CFA exam at different times in your life.
CFA Level 1 Prep: During College
Pros: The most obvious “pro” to CFA Level 1 prep during college years is the fact that you get a CFA exam out of the way early – assuming you pass! No matter how busy you think you are in college, rest assured, life gets busier as you get older. In college, you are already in “study mode”, and thus the discipline needed to sit down and study is no far stretch. Save yourself many late nights after work when you’d rather be relaxing.
Studying in your younger years will also be a boost for your resume. The initiative you signal to employers is definitely a plus! Also, if you are a finance, accounting, or economics major, you already have much of the knowledge under your belt (and it’s probably fresh!). CFA Level 1 prep will be fairly easy if you’ve recently been tested on similar subjects.
Cons: A full college workload can already be daunting. Make sure you balance your obligations carefully. I’ve seen some students try and take on too much. The CFA Level 1 exam is hard and can be expensive. If you find it too hard to handle on your own, you can always get an online CFA tutor to save yourself time. If that still doesn’t cut it, don’t bother wasting money on the exam. Wait until your evenings and weekends are free when you enter the working world.
Another con with regards to studying the CFA material in college, is that on-the-job experience helps. While it’s a minor negative, context will reinforce your ability to retain certain concepts. Without financial services experience the curriculum can be hard to conceptualize. All that said, college is almost entirely theoretical – thus, a pass is still achievable without on-the-job experience. 🙂
CFA Level 1 Prep: During Your Working Years
Pros: CFA Level 1 prep during your working years is a much more traditional approach. Most CFA candidates choose this well-trodden path. You’ll find that many of your peers are studying for the exam at the same time, which can be helpful. The old saying “misery loves company” comes to mind.
Studying while you hold down a full time job will also likely surround you with others that have experience (or are experiencing the same exams – assuming you’re in the financial services industry). If you are outside the financial services industry, studying will certainly get you to where you want to be faster.
Finally, at work you’ll likely only be studying for this exam (as opposed to multiple others in college). Your ability to focus on only this outside of work hours will be valuable. Speaking of value, tutoring services will be relatively more affordable for you (assuming you’re earning an income) at this point in your career. It can really cut down on your study time. Consider a CFA tutor to boost your performance in a shorter time span. It proves effective whether online or in-person.
Cons: There is only so much time in the day. If you work a demanding full time job, there is not a lot of time left to study at the end of the day. Most students I’ve come across can get in two hours a night if they are lucky. This generally means that if you aren’t working weekends, then you’ll be studying on them. Unless you are a phenomenal test-taker (or borderline genius), the amount of study time you’ll need to pass the exam is going to require a full 4-5 month commitment of 15 – 20 hours per week. Consider this before you plop down a hefty registration fee.
Lastly, your bosses in the working world are not the same as your college professors. Most of them don’t really care whether you pass your exam or not (sorry, hard truth). They may be happy for you if you pass but they ultimately want you to get your work done. Don’t expect to be able to study during work hours. You might be allowed to take some time off from work to study. But, this of course, depends how amenable your boss is to the idea. Unfortunately, most people have to use vacation days – and most new employees have a limited number.
Wrapping Up
Overall, like most things, the ultimate decision on when you start your CFA Level 1 prep is a personal choice. The earlier you can get the exams out of the way the better. In your mid/early 20s, you can experience a failed CFA Level 1 and the consequences rarely result in a major life disruption. On the other hand, if you have a spouse and two kids, then failing the exam means a lot more time away from the family. This is a common deterrent for many. Decide what works best for you, and come up with a good plan for your CFA Level 1 prep. As you move on to Level 2, you’ll need even more time. Take your time getting through the material, but make sure you start early.