Note from the author: The information provided in this section represent my suggestions based on personal research and anecdotal evidence. Although the recommendations are backed with data, they are not steadfast rules. They may not apply for you.
A common question I've seen actuarial candidates ask is, "which exam should I take next?"
This video walks through each exam leading up to Associateship with the Society of Actuaries, and suggests a path of least resistance. You are not required to take the exams in this order. However, it may save you time and frustration in the long run.
Why Take Easy Exams First?
In the video, I suggested frontloading your actuarial exam journey with the easier exams (“easy” meaning what’s relatively easy for you), but did not explain why.
Below are five reasons why taking easier exams first is more effective than getting the harder exams out of the way:
- Experience: The experience and discipline you learn from studying carries over to the next exam. So when you study for exams you will get better at studying for future exams.
- Positive reinforcement: There are psychological benefits to passing exams because the more exams you pass, the more confident you will be about your ability to pass future exams. Also, the closer you are to associateship, the less likely you are to give up.
- Risk mitigation: You don’t know when exams will change, so take the easier exams when you can. Put another way, you are increasing the conditional probability of attaining associateship with each pass.
- Resume: By getting more exams under your belt earlier, you have a resume boost in case something happens.
- Maximize lifetime savings: A setback of 6 months on a $2,000 exam raise does not simply equate to an opportunity cost of $1,000 ($2,000 prorated over 6 months). All subsequent exam raises are also delayed by 6 months. So if all subsequent raises total $20,000, a 6 month setback has an associated opportunity cost of $10,000+$1,000=$11,000. The total lost earnings increases for each failed exam, although the opportunity cost per fail decreases with each additional pass. Considering exams are generally taken early in your career, these numbers can easily compound into six figures ($100,000s) over decades had you invested the lost earnings immediately. A counterargument to this is that at some point you will have to take the harder exam anyways. I would argue that your chance to fail a harder exam later can be mitigated due to points 1-3.