Hungover Enlightenment (My CFA® Origin Story)

Hey all, recently started a personal finance/investment blog and wanted to share my CFA® origin story. This is told from the perspective of 22-year-old me so some of the assumptions will be comical to the WSO crowd (my ship probably already sailed on making it to a BB in NYC before I even set foot in college). I thought I'd share the story of a young slapdick weighting the pro's and con's of taking the CFA® and how I believe if I can pass all three levels on the first go-round than certainly anyone can. Enjoy!

I wish I could sit here and tell you that from day one, I appraised the value of the CFA® credentials, set a game plan for passing all three levels, and hit the books with such discipline and focus it’d make a Buddhist monk jealous.

Nooooope.

The beginning of my CFA® journey occurred in November of 2011.

After the previous night of drinking multiple pitchers of dark Spaten beer, doing the chicken dance while simultaneously eating sausage on a stick, and enjoying the heaven on earth that is Wurstfest, I awoke from a hangover so brutal, so excruciating, so GD painful, it caused me to re-evaluate my life.

Ziggy! Zaggy! Ziggy! Zaggy!

Oi! Ugh! Bluhhhhhh.

It was a life-changing hangover.

I remember waking up feeling regret and remorse, as we do when hangovers occur, and wondering what the hell am I doing? At the time, my dream was to pursue a career in Equity Research in the city that, Sinatra eloquently sings, never sleeps.

So what did I realize that day? And what pushed me to start my CFA® journey?

The Thought Process

A Disconnect Between Dreams and Reality

My grades were very average (mid 2’s if I recall) and I wasn’t attending a top business school by any stretch of the imagination (Sorry Texas State, I still love you!).

In other words…

I was on a comet screaming toward mediocrity and it scared the shit out of me.

Fuck, what’s the fastest way to show employers in NYC that I took my education seriously and I truly wanted to work in finance? How can I make the biggest splash in the least amount of time?

One, do everything you can to boost your grades and limit the damage you’ve already done to your GPA, two, differentiate yourself by taking and passing level one of the CFA® examination before you graduate and lastly, make steps one and two NON-NEGOTIABLE.

The upside, I thought, would be that I’d be differentiated enough to get the bulge bracket banks or institutional firms to give me a look. The downside? A life of averageness where I toil away doing mundane uninspiring work, always wondering ‘what-if’, and be out a grand and around 300 hours.

Was this upside/downside analysis rational? Certainly not. But, sometimes putting an inordinate amount of fear and pressure, rational or not, on oneself is necessary to get shit done.

An MBA Equivalent with No Debt

Well, actually there’s a little fibbing in the title, the first and only time I’ve ever carried a balance on a credit card was in order to pay for level one CFA® exam fees and study materials. Unfortunately, I lost out on a few CFA® scholarships that were given out by the CFA® charterholders on the university staff, so accruing a little debt was required (as was a chip on my shoulder to prove some professors wrong).

Anywho…

I knew from researching online that there was a debate about the relative value of the CFA® charter versus getting an MBA. I researched job openings in investment management and many of the applications stated “CFA® /MBA desired”. That simple “/” was enough for me to conclude the CFA® designation was a sufficient equivalent to an MBA degree.

The value proposition of paying for the CFA® exam fees and study materials, which ended up being around $5,500 for all three levels, against paying anywhere from $75-200k to get an MBA from what would have been an average MBA program (remember I was a slapdick for half my college career) seemed like a no-brainer.

And finally…

I Heart Finance

As you probably know by now. I’m interested in the ins-and-outs of this finance nonsense and recently found out my personality is a perfect fit for it. I knew when I was a little kid I wanted to “be in the stock market.” Even in 2011, there was no doubt in my mind that I was born for this line of work.

As Abe Petrovsky (Martin Landau) says in Rounders,

"We can’t run from who we are. Our destiny chooses us."

Damn, it’d be a shame not to try and live up to your potential, wouldn’t it?

I knew I had the temperament to get through a grueling three-part exam because I’d be genuinely excited to learn about how to value assets and manage a portfolio. Studying wouldn’t be a grind but an opportunity to learn a body of knowledge I was, and continue to be, fascinated about.

So in December of 2011, I officially made the plunge to dedicate around 300 hours to studying, taking, and passing level one of the CFA® exam. Since then, I’ve passed all levels of the CFA®, CAIA, and FRM examinations without failing a single level and managed to pull my GPA up to a 3.06.

Cool story Scott, you vain asshole, why are you telling me this?

Because if a then hungover 22-year-old from an average college with a sub 3 GPA can pass level one and later conquer the “Mount Everest of Finance” then anyone can.

I truly believe this.

Why?

Because the CFA® examination is overwhelmingly a test about discipline and persistence than it is about financial smarts. 300Hours conducted a survey and uncovered that those with only a finance-related educational background (and no work experience) actually had a lower pass rate (59.3%) than those with zero finance in their educational background (65.6%). Why? 300Hours states,

"Our theory on this is complacency. A common feedback we’ve observed anecdotally is that candidates with finance or economics degrees may take it easier than other candidates. Additionally, without a work requirement to spur them on, candidates may find it difficult to maintain the drive and discipline necessary to complete their preparations properly."

Those candidates with a financial background should have had an intellectual advantage but instead displayed hubris because of their education, got careless with their studies, and ultimately failed.

People vastly overrate the importance of natural ability and talent for achieving any goal they set for themselves. They simply get discouraged, tell themselves. “Well, I guess I wasn’t meant to do or be this”, and quit too soon. I’m here to tell you that you’d be surprised at what you’re capable of.

So…

SET GOALS, PLAN OUT HOW TO ACCOMPLISH SAID GOAL, DON’T OVERTHINK IT AND FUCKING DO IT! IT’S THAT SIMPLE!