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Is the CFA exam worth it?

·2 min read
A test.
A test. PeopleImages/iStock

Here are three of the week's top pieces of financial insight, gathered from around the web:

An $800,000 wash-sale fiasco

An obscure IRS regulation left an amateur stock trader on Robinhood on the hook for an $800,000 tax bill on a $45,000 profit, said Juliet Bennett Rylah at The Hustle. The unnamed trader ran afoul of something called "the wash-sale rule," which restricts traders from buying back a security within 30 days after selling it (or a "substantially identical security") at a loss. It's meant to deter taxpayers from harvesting tax advantages from stock losses. In this case, the investor "made 10 to 50 trades daily" after opening his Robinhood account last year. He ended with a $45,000 gain on more than $45 million in transactions before year's end, but his $800,000 in short-term gains were still taxed as ordinary income.

Is the CFA exam worth it?

It's never been tougher for aspiring asset managers to get licensed, said Claire Ballentine and Natasha Abellard at Bloomberg. The chartered financial analyst certification, or CFA, has long "been held up as a no-nonsense, low-cost path to getting a foot in the door of the otherwise clubby world of high finance." But pass rates for the three-part exam "plunged during the pandemic" to the lowest levels since 1963. Just a quarter of test takers passed May's Level I exam, and only 42 percent cleared Level III. The low figures have raised questions about whether the program's benefits — including accessibility and affordability — are "outweighed by strains on candidates' time and effort." CFAs generally spend more than 300 hours studying for the exam levels. An MBA program takes two years (costing upward of $140,000), but "graduation rates are above 90 percent."

Amazon adds tuition for workers

Amazon last week became the latest large employer to offer free college as a workplace perk, said Annie Palmer at CNBC. The e-commerce giant said "it will cover the cost of tuition, fees, and textbooks for hourly employees in its operations network after 90 days of employment," with the benefit applying to "hundreds of educational institutions across the country." Amazon said it will also cover "high school diploma programs, GEDs, and English-as-a-second-language certifications." More companies are dangling educational benefits as a lure for hiring and retaining workers amid an increasingly competitive labor market. Walmart said in July it would fully subsidize tuition and books for 1.5 million part-time and full-time employees, and expanded its college partners. Target, Chipotle, and Starbucks have made similar commitments.

This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.

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