Is the CFA Worth it? How to Pass Level 1, 2 and 3 Exams

After passing levels 1, 2 and 3, I’m better equipped to answer if the CFA is worth it. I also know many others that have passed the exams. And for a short answer, the value you unlock depends on your goals and career path.

To help you decide if the CFA designation is worthwhile, I’ll share what I’ve learned. I’ll also share some study tips to help you pass the exams. But first…

Is the CFA Worth it?

Without a doubt, I think that passing the CFA exams is worth it. However, the CFA Institute is chipping away some of the value. Check out my video to find out why…

As I point out in my video, those are small chips in value. I still believe the CFA is worth it…

If you want to work in finance, the CFA designation is the gold standard. If you’re considering investment banking, venture capital, private equity, or other related roles, I recommend the CFA route.

Many employers will give you a pay bump for being able to use the letters behind your name. But of course, the real value is what you learn and how you apply it. If anything, it can give you a foot in the door. Then you can advance based on the value you bring to the table…

Why I Took the CFA Exams

About eight years ago, I worked in Beijing at a crypto company. But for the most part, I haven’t worked directly in finance…

I worked in the publishing industry for seven years. However, it was at one of the world’s largest investment newsletter companies. And getting to know other CFA candidates (who worked at big banks), it sounded like I was applying more of what I was learning.

Passing the CFA exams didn’t lead to a direct pay bump. But what I learned helped me to advance faster. I was often a go-to source for research and double-checking investment logic.

On top of that, studying to pass the CFA exams equipped me with many useful concepts…

No matter what company I land at, money is a common denominator. And money is just a measuring stick of value. Studying for the CFA exams can give you a better understanding of the time value of money. It can help with making better investment decisions.

Going one step further to answer if the CFA is worth it, consider what it takes to pass the exams…

Is the CFA Hard?

studying for the hard CFA exams to find if it's worth it

Overall, passing the CFA exams is a huge accomplishment. It can take 1,000 hours to pass all three exams. On top of that, it can take 3, 4 or more years. It’s a huge commitment and the recent pass rate for level 1 came in below 40%.

When I go to events and meet people in finance, they tend to pay more attention once they learn I’ve passed the exams. The core study material is roughly 6,000 pages. And these aren’t pages with a big font and pictures. Instead, you’ll find a lot of diagrams, terminology, concepts and examples.

To know if the CFA is worth it, consider this… I double majored in finance and accounting at a good school (Iowa State). But I’d say passing the CFA exams is more valuable.

One big reason for this is that the exams are standardized. Whether you take the CFA exams in Australia, China, India or the U.S., the questions are the same. Schools, on the other hand, are too inconsistent.

I’ll often run into finance graduates (Bachelors and Masters), who seem to know little about investing. This ties into one of the most common questions I get…

Should You Get a CFA or MBA?

Compared to most MBAs, the CFA is more valuable. And if you have no desire to work in finance, I’d give the same answer. Going one step further, I’d say 90% of MBA programs aren’t worth the cost. The programs vary way too much, and the value largely comes from the alumni and networking.

This leads me to the big caveat… if you’re getting an MBA from a top school, it might be more valuable. On top of that, it can make more sense if your employer is paying the bill (without big work commitments).

Non-finance people will also often confuse the CFA with the CPA. And that might be similar to confusing a doctor with a nurse. Both have value! But hearing from people that have passed both, they say the CFA exams are harder.

Other than a few caveats, the CFA is worth it when compared to the average MBA or CPA.

Benefits of CFA Exams

To further answer if the CFA is worth it, here’s a summary and more ideas. With the CFA designation you can…

  • Gain respect from finance professionals
  • Improve your networking
  • Get a foot in the door at finance firms
  • Return a higher ROI than most MBAs
  • Boost your salary and career
  • Refine your personal investing
  • Connect more dots in the business world

I hope this insight helps you decide if the CFA is worth it. And if you start this journey, here are some tips I wish I knew sooner…

How to Pass CFA Exams 1, 2 and 3

For each CFA exam, pay close attention to the section weights. And I’m not listing them here because they can change each year.

For the most part, you’ll want to focus on the heaviest weighted sections. On top of that, if you’re time constrained, avoid the most challenging sub-topics. For example, I didn’t spend too much time on the economics content. There are plenty of useful ideas, however, it’s pseudoscience.

Also, start studying sooner than later. I was working full-time when studying for the level 2 and 3 CFA exams. It’s easy to put it off, but consistency is key. It helps with concept retention and connecting more dots.

For the first exam, I bought 3rd party books. But for level 2 and 3, I stuck with only the material from the CFA institute. The only extra study material I’d recommend is formula sheets (I made my own as I studied).

To increase your chance of passing, the best thing you can do is practice problems and mock exams. This reinforces what you learn from the reading material. And you’ll find plenty of questions and examples in the books from the CFA Institute. But you’ll also find lots of extra questions on its website.

When I sat for each exam, it was three hours in the morning and three in the afternoon. But since, the total has dropped to four and a half hours. If you’re a slow test taker, don’t overthink it when it comes to test day… Get to the end and if you still have time, go back to the questions that require formulas. If you weren’t sure, test different formulas and inputs.

Is the CFA worth it? I hope you now have a better answer to this question. And if you have any questions, please comment on any of my YouTube videos. Or I’d appreciate a simple hello or thanks 😊 because it motivates me to keep sharing ideas. Also, here’s a useful finance concept that shows up in the exams.