CFA Level 1 – Preparation Strategy

How many hours are needed to prepare for CFA L1?

CFA institute recommends 250 hours, however CFA institute inherently assumes that you
are a typical CFA candidate, which means that you have a finance background and/or
finance work experience.

For someone with average ability and no finance work experience and no finance
background my estimate is 400 hours.

Let’s suppose you study 3 days on week days 2 hours each and on 2 weekends you study
5 hours each that makes it 16 hours in a week. That is equal to 64 hours in a week or 384
hours in 6 months duration. Add 16 hours for revision etc.

Why I am keeping two days off on week days is because on some days you are tired and
don’t want to study and on some days you have some obligations etc. Some days you will
study but won’t learn much. This way you can have some social life.

So basically you need to study for 6 months: 2 hours on 3 week days and 5 hours/day on
weekends, making 16 hours a week.

Failure Strategy

Some one can say that I will study 3 months and put 350 hours. This translates to 30
hours a week which means 2 hour every week day and 20 hour on weekend.

The problem with this strategy is that the material of CFA is easy but it needs certain time
to get assimilated. You would be reading everything, understanding something and at the
end of 2 months remembering almost nothing.

Study material – Scheweser, Stalla, Curriculum Book, Secret Sauce, Video Lecture,
Audio Tapes, Quick Sheet, Q Bank , Passmaster , CFA Institute Exam Papers

Let’s define these one by one

Scheweser is a third party course provider/ study notes provider. As there is water in a
desert similarly there is Scheweser for CFA exams. Wikipedia says Conventional wisdom
for clearing CFA exams is to study from Scheweser notes. The mool mantra for clearing
CFA is “Stick to Scheweser and Pray to God.”

Scheweser provides the following material

1.) Study notes – 5 books for theory and 2 books containing a total of 6 CFA exam papers
based on the actual CFA L1 exam pattern.

2.) Secret Sauce – A compendium of formula and basic concepts of the entire 5 theory
books. Good to have but not a must.

3.) Video Lecture /Audio Tapes – This contains the theory of the CFA books explained in
audio/video tapes. Buy it if you have time, money and learn better by listening or
watching. I would avoid it as they are already enough books.

4.) Question Bank – A collection of 4000 objective type problems presented in a CD

format. You can either take a CD or else you can access the questions online. There is
quantity but not quality in these problems. Try to get CD from your friend but don’t buy
it.

Stalla is another third party course provider/ study notes provider like Scheweser. It
provides all the stuff that Scheweser provides but with different name. Passmaster is the
Question Bank for Stalla

Curriculum Book – These are the 8 kg of books provided by CFA Institute. Excellent for
learning difficult/new material and has very good end of the chapter questions.

The only problem is you need more time to read the material, revise the material and
unless you make notes you will have difficulty separating the wheat from the chaff. That
is material that is important for the test and the material that will not be asked on exam.
Many people pass from reading CFA books however if you plan to do so make notes.