I asked many students how to study for Exam P and FM. Most conversations were some version of: “first learn from the manual, then do as many practice problems as you can”.


I wanted more details. How many problems do you do per section? Which study resources best represent the actual exam? How many full practice exams do you complete before exam day?


As I passed more exams and refined my study skills, I realized I had been overlooking an important part of the study process: how to read the study manual.


I spent around half my study time reading from the manual, and the other half reviewing. But 90% of my discussions on study strategy were focused on the review portion. Discussions about reading never got deeper than “how many sections do you read per day?”.


Actuarial students overlook the skill of how to read. Maybe because we’re math people, and we think reading is for the English and Writing students. Or maybe because we learned how to read as children, and we assume everyone has already mastered the skill.


However, you will spend hundreds of hours reading from study manuals throughout your exam career, so you want to make sure you’re doing it effectively. You will save many hours when you grasp concepts the first time and don’t need to relearn them. (This skill becomes increasingly important on the fellowship exams where you have over 1,000 pages to read)


In this article, we’ll address common problems while reading the study manual, and how to fix them so you can quickly learn actuarial material.


Ineffective Reading


When I studied for my first exams, my reading process went something like:

Me: Today I need to read the section on Bonds.

*Open study manual, start reading*

Manual: A bond is a debt obligation in which the issuer promises to pay the holder a definite sequence of interest payments…

Me: Debt obligation… shoot. I still have to pay off my credit card for this month. I’ll do that later – back to studying.

Manual: The formula for a bond price is…

Me: I’ll highlight this formula to memorize later. How many more pages do I have left? OK, I can get through this.

*Continue the process of reading/mind-wandering until I finally finish the section.*


I was trying to force feed myself facts without giving them meaning. It was hard to focus on the readings, and even harder to connect the dots between different sections of the manual.


I was memorizing formulas without understanding context – I knew how they worked, but not when to apply them. I was learning everything in isolated chunks, rather than a continuity of concepts building off each other.


The result: inefficient learning. Without adding meaning and context to new information, it quickly slipped from memory, and I spent hours relearning it as the exam drew near.


In Actuarial Exam Tactics, we compare the learning process to building a “knowledge tree”. You won’t make progress adding new details (leaves) if you don’t have a foundation (branches, trunk) for them to hang on to.


So how do you build this foundation and add context to new information? How do you keep yourself engaged while reading?


Tips for Effective Reading/Learning of Actuarial Material


The problems from the last section can be summarized as: lack of curiosity. The first step to solving this issue is realizing that you can cultivate curiosity – it is not a fixed trait. We’re more curious about subjects when we understand why they are important. We need context.


We’ll discuss tips for 3 different stages of the initial learning process:

  • Before reading a section
  • While reading
  • After you finish reading


Before Reading your Manual

1. Skimming the section


I used to read each section front-to-back. However, I didn’t always see the overarching theme of the section and how the details fit together. Skimming fixed that problem.


Skim the section headers, diagrams and keywords to create a roadmap of the main ideas. You’ll recognize what you need to know, and then you read the section to fill in the details of your mental roadmap.


The mental roadmap keeps you more engaged while reading. Rather than trudging through the manual in a linear manner, you have a high-level organization of your thoughts. You won’t be force-feeding random facts, you’ll be organizing information in a meaningful way.


(You can also try Roy’s video game method, using the practice problems to further develop your mental outline before reading.)

2. Preliminary research to add context


When you skim a section, you may find completely unfamiliar terms. The point of skimming is to add context, but that gets thrown out the window if the technical jargon means nothing to you.


Take a few minutes to research these keywords online. I was completely unfamiliar with bonds when I first read my FM manual. Rather than jumping in and memorizing pricing formulas and other details, it helped to first do a quick Google or Investopedia search.


What is a bond? Why do they exist? Who uses them? I wasn’t looking for the jargon-filled textbook explanations. I wanted simple terms, so I searched online.


You shouldn’t expect to get complete clarity at this stage. Most importantly: you asked the questions and attempted to find answers. You are cultivating curiosity.


Now you’ll read your manual searching for answers to these questions. You’ll have purpose while you read, rather than aimlessly trying to absorb information.


The pricing formulas make much more sense when you understand the basic concept of a bond. A little research up front goes a long way.


While Reading

3. Make concrete, personal examples


Actuarial material is challenging due to its abstract nature. It’s hard to visualize what you’re learning and why it matters in the real world.


The easiest way to make the material concrete is through personal examples. When reading about simple vs. compound interest, ask “what would this mean for my personal savings account?”


Instead of thinking about loans between two companies, think about lending money to a friend.


What if you could raise money for college by issuing bonds? Would it help you if interest rates went up or down? Why would you care about portfolio immunization?


The material is more interesting and easier to remember when you can relate it to the real world (and better yet, your personal life).


4. Simplify complex material to its fundamentals


You will struggle with a new concept at some point (or many points) while studying for your exam. Often, the struggle is from encountering too many unfamiliar concepts at once.


A complex formula has many underlying components; if you don’t understand the building blocks, you will struggle to understand the formula.


I initially struggled understanding the intuition behind the annuity formula derivation. I understood the stream of fixed cash flows and discounting with interest (time value of money). However, I didn’t understand geometric series, a fundamental step in the annuity formula derivation.


I broke the formula down, identified my lack of understanding, and then researched and practiced geometric series problems. After mastering these fundamentals, the annuity formula (and increasing/decreasing variations) was intuitive and easy to remember.


When you’re stuck on a complex topic, break it down to its fundamental components. Identify which of those components are confusing, and focus on learning those individual parts (often through independent research).


5. Writing notes in the margin


I used to rely on highlighting and underlining. However, writing notes in the margins was more useful for long-term retention of the material. You put more thought into the ideas when you write them down than you do when underlining them. Greater mental effort => greater retention.


Writing in the margins goes together with the previous steps. Did you think of an interesting example or analogy to understand a new concept? Write it down.


Is this concept similar to another section of the manual? Does it build off earlier material? Make note of these connections.


Did you think of questions while skimming the section headers and keywords? Write them down so you have a clear purpose while reading. (Read more about this system of writing your own questions)


When you break complex ideas into building blocks, make note of those fundamental concepts. It will help you organize your thoughts and identify areas for further research.


Putting pen to paper keeps you active and engaged during the reading process.


After Reading

6. Schedule a review session within the next week


I made a big error while studying for FM and P. After reading each section, I didn’t revisit the concepts again until after finishing the entire manual.


We quickly forget new material if we don’t schedule frequent reviews. In Actuarial Exam Tactics, we illustrate the forgetting curve and how to improve long-term retention. Spaced reviews are one of the most effective strategies.


Within a week after reading a new concept, you should review the material. Don’t re-read your manual; test your knowledge by doing practice problems, flashcards, or answering the questions you wrote in the margins.


This spaced review will cement the information in memory, and help you make connections to the new material that you encounter.


How to Use these Tips

The length of this article makes these tips seem overbearing. However, implementing them is simple:

  • Before Reading (10 minutes)
    • Build a mental map: skim the section headers, keywords, formulas and diagrams
    • Research unfamiliar terms: what is a bond? Who uses it? Why is it important?
  • Read the chapter
    • Make personal examples – make it relevant by leveraging your existing knowledge
    • Break complex concepts into their building blocks – identify and research weak points
    • Make notes in the margin – write down your questions, useful examples/analogies, and connections to other concepts in the manual
  • After Reading
    • Review the information within the following week (see our sample chapters for more details on effective review sessions)

One of the best skills I developed during my study process was how to read and retain new information. When you get to fellowship exams, this becomes critical as you have more material to read, and fewer practice problems to fall back on.


The quickest way to cut down on total study time is to learn things well the first time, avoiding the need to relearn them before the exam.


Pick at least one of these tips to try during your next study session. We’d love to hear your results!


Study Smart, Pass Fast, Live Life

Mike & Roy


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