Series 7 Securities Licensing Exam - Chapter 25

Annuitites

I really like annuities. I think they are a good way to create income in retirement, barring something I cannot see. The investments grow tax-deferred and when you get your distribution you will likely be at a lower tax bracket than when you were in your asset accumulation phase.

I did well on the test, missing two. #8, 13.

the SEC considers the separate account a security and the separate account which technically is the annuity must register with the SEC. the explanation admits to this being a tricky question, albeit one with "only one correct answer".

a mortality guarantee is an annuitant agreeing to receive payments for life. i thought it was the agreed period of time, but that is actually called a period certain.

Series 7 Securities Licensing Exam - Chapter 24

Direct Participation Programs. A lot like LLP's.

Missed four questions. 6, 7, 8, 12

what kind of risk is a DPP subject to...i said systemic and liquidity, which were correct, but also legislative risk is a concern. i guess because congress can change laws. that seemed like a stretch.

raw land question. i didn't realize that it cannot be depreciated.

common types of DPPS. I missed this b/c they all looked like DPPs, and I remembered reading about them all. but apparently only the single-tenant leases, shopping centers and government-assisted housing programs are. While warehouse corporations are a DPP, they are "another kind" of DPP (yes that is what the explanation says!).

in a blind-pool investment - i had this one right, in that the the GP chooses the programs investments, as well as the DPP only needs to state what type of investments it is going to make, not the specific investments. but i muddled the prospectus into the mix, and they do have to provide her with a prospectus.

Series 7 Securities Licensing Exam - Chapter 23

Mutual Funds = MUTUAL FUN-ds

Have I mentioned yet that I am dreaming about what I'm reading? Dapo said that it's good it gets in my subconscious, to which i quipped that will be great if i'm at the test and can't think of the answer, I will just fall asleep.

Missed 9, 13, 15. Felt good with material.

Questions missed were about a balanced mutual fund. investors can purchase part of a share, whole shares and the NAV represents the value of the share. I missed this because the answer listed "ONLY" whole shares, along with another choice for fractional shares...so I thought because it said ONLY it had to be wrong since you can buy fractions, anyhow.

i did miss what a letter of discount does...gives a period of 13 months for an investor to purchase a certain dollar amt of shares.

i thought long-term capital gains were capped at 15%, but according to the answer it is 20% - thought the text on p. 469 says 15...capital gains are paid on dividends EVEN if they are reinvested. the only way not to pay cap gains is to invest in mutual funds for munipalities.

Series 7 Securities Licensing Exam - Chapter 22

Got four ?s wrong. 1, 2, 9, 14. Also, I always have a couple I guess at that I get right. Of course, there are always a couple that I guess at and get wrong, too. :0)

Questions were on function of an investment company (pool investors funds, offers mgmt of funds, maintains diversified investments.) the price of the securities is determined by the market.

face amt certificates investors can redeem prior to maturity, but do not receive the FULL face amt...what they receive is determined by a formula. I answered that Mortgage owners had to buy them...because I thought it was the lenders who at one point in time had to. but it was the lenders that made the borrowers buy them.

REITs do not pay taxes on their ordinary income if they redistribute 95% of it to its investors.

#14 I got wrong for not reading it well...Investment companies must register w/SEC, offer a prospectus and solicit proxies for matters requiring shareholder approval. Investment objectives can be changed by a majority approval of STOCKHOLDERS and the answer said MANAGEMENT.

I knew better.

So, I'm starting to see some familiar concepts and terms and so the material is a little easier to read. At least in this chapter. I'm 2/3 of the way through the book.

Will order a new book on Tuesday...hopefully the new book will be here by the time I'm done reading the next 10 chapters in this book. haha...that shouldn't be a problem.

Series 7 Securities Licensing Exam - Chapter 21

Eek, didn't do well on this, either 7/15 on Margin Accounts.

Missed 4, 5, 9, 10, 11, 13, 14, 15.

missed a ? on what happens when a restricted account is declared. i got 1/2 the ? - that it has fallen below 50% LMV - correct; missing the part which she must do for any further purchases...which i erroneously said deposit 100%. she only needs to deposit 50%.

missed ? on what happens to DR and EQ balances when SMA is used to purchase stock on margin (DR goes up by full amt of margin plus excess, not just excess) and (Equity balance is not effected.

LMV does not increase when interest or dividends are paid to margin accounts.

missed two (one regarding a short sale going down, the other LMV going up), i.e. LMV of a long acct goes up, creating an excess amt put into an SMA. the LMV goes down, what happens to the SMA? nothing, b/c it is a "DR" and the DR doesn't fluctuate with LMV. (only with payments or interest, etc.) SMAs only decrease if a withdrawal is made or securities are purchased w/it.

? on calculating excess. reg T requires 50% of SMV on short accounts. if SMV = 1900 then 1900 x .50 = 950. if EQ = 1800 then excess is EQ - 50 % x SMV. 1800 - 950 = $850. i think i had used CR to calc the 50%, instead of SMV.

a question on combined equity, which = LMV - SMV + CR - DR.

finally a ? on a nonequity corporate bond, which i could not remember the formula for, and just guessed.

Series 7 Securities Exam - Chapter 20

This is on customer accounts which was pretty straight forward.

Missed 3?s. # 5, 8, 12.

5 was a question on custodial account. i know that if the acct makes income of more than 1400/yr it must be taxed at the custodian's rate. but i answered that the minor would pay those taxes under their SSN, but it is actually a portion of the $1400 at the child's rate (*15% usually) and the balance at the custodian's higher tax rate (i.e. 30%).

missed a question about a fiduciary account where the answer should have been the prudent man rule, not the fiduciary investing as he or she sees fit. Which to me, is kind of the same, but i get what they're trying to get across here.

if an individual dies w/a will it is testate. if they die w/o a will, it is intestate. the question says if the individual dies leaving a detailed will which of the following types of accounts distribute the estate? answer a) intestate b) executor account. they said the right answer is A and I answered B because *an executor is the executor of the will...

so i think i'm right on that last one.

12/15 or 13/15 depending on my appeal. :D

Series 7 Securities Exam - Chapter 19

Forex Options

Options based on trade, using the option to purchase currency at a given strike price. The given strike price is based on exchange rates.

Okay stuff, if you have an investor whose company trades or has substantial retail services oversees.

Missed questions 1, 4, 6, 7, 8, 11, 14. D:

ECUs contract size are 62.5k. I thought that was just DMs.

The question on if a currency is expected to increase what should the investor buy i said a call option on the USD, but the answer is a call option on the foreign currency. of course, that is b/c it was the franc which was expected to rise. if the dollar was expected to rise, i would have been right. but i wasn't.

i had absolutely no idea how to calculate the margin requirements since they are terribly complicated. it is not the same formula as a security index.

one ? was on if a DM fell and he had a call what would he lose. i neglected to mulitply my answer by the # of contracts.

i missed one ? calculating the premium of a french franc b/c i took the "tenth of cent" decimal the wrong way. i missed another question calculating DM b/c i multiplied the contracts by the $1.77 not $0.0177 (which is that darn tenth of a cent thing again). also once multiplied by the tenth of a cent, the premium amount needs to be mulitplied by the # of DM in the contract, not the number of contract (instead of 100k, 62,500).

# of yen in a Japenese yen contract is 6,250,000 not 62.5 M.

onto a new section!

Series 7 Securities Exam Chapter 18

YAY I got 100% on this portion of testing.

It was on Index Options. I like it! Technically, I got one question wrong, but the answer by it's own definition said the one I chose was correct. Obviously a misprint and/or editing error...

sigh.

Next up Foreign Currency Options.

Series 7 Securities Exam - Chapter 17

This chapter was on Options Strategies.

Pretty interesting stuff.

Missed a lot of questions. I did discover, however, that this book is one of the most poorly rated topical material for the Series 7 on Amazon. The ratings were 2 and 1 stars across the board. I was glad I'm not the only one finding serious flaws in the editing and etc.

Missed ?s 1, 2, 3, 9, 12, 14. Straddles FOUR times. How to purchase one (buy a call, sell a call). What the profit would be one one given x parameters. And the break even point on the straddle (I picked the choice that gave only half of the correct answer - the call - without realizing it should also be the put, thinking that the put would not gain him money but would actually cut into the premium. Silly me.) What points the straddle encompass ie the break even points on each side of the put and call (which is to add the premiums paid to the strike of the put and subtract the premiums from the call, creating a Put Less Premium to Strike to Call + Premium range).

Breakeven point on the long call spread is the net premium (premium made by writing less the premium paid by buying) plus the Call Strike price.

Okay, two more chapters on this very long sections and I will be done. YAY.

Series 7 Securities Exam - Chapter 16

Equity Options and Trading

Did terrible. Missed 4, 6, 7, 12-15.

Question content; trading deadline of options. twice. to buy/sell stops at 402. HOLDERS window to exercise ends at 530.

OCC's role in the market.

Margin minimum and basic requirements. Twice. One covered and one uncovered.

CROP and options exchanges need educational material.

CROP and how many contracts on a single side of the market, exercise limits.

To close a hold position you make a closing sale.



Whoop tee do.

Series 7 Securities Exam - Chapter 15

Wow. I expected this chapter to be easy since I felt good about its sister Chapter 14 on Call Options. The Put Options are a little different, though and really took some chewing to figure out.

I tested the best I have tested thus far, missing only two of the 15 questions. Both questions were with regards to having a Put Call and it being in the money and what happens if a closing purchase is made. Who makes money and etc.

Good stuff.

Up next: Equity Options.

Securities Licensing Exam - Chapter 14

Well, slowly but surely I am getting through the material. I enjoyed this chapter on options, I see how if you have the tolerance for the risk and market knowledge and are astute how it could work in your favor for big $. Basically legalized gambling, though. My book actually uses the word "bet".

I missed four questions: 3, 10, 14, 15. Two of the questions (3, 15) were the same, on calculating intrinsic value. I did the calculation correctly, but where i erred was that I did not multiply the answer by the number of lots.

then on a ? about what the most a writer with shares in inventory could stand to gain/lose on a call option. although i calculated the gain correctly, i chose the option of "losses are endless" when in fact, they can actually only lose as much as they paid for the stocks/inventory cost.

finally, if a purchase of a call is made, it is an opening purchase (versus an opening sale, closing sale/purchase).

Liked this chapter. Excited to read #15 tomorrow which is on Put Options (today was Call Options, or options to buy).

Securities Licensing Exam - Chapter 13

Finally, some test results that match how I felt while testing.

I got 12/15 on this section about the NASDAQ / OTC market.

Missed #1, 2, and 8.

pink slips are NON-NASDAQ quotes, not vice versa.

NASD traders use level two of the NASDAQ system, as well as SOES which is the small order entry system. if the order is fewer than 1000 shares they enter it themselves.

the Rules of Fair Practice govern how Dealers deal with customers. I think I said the Code of Procedure, which is how dealers deal amongst each other.

yay. next up: FIVE chapters of OPTIONS [waah waaah].

Securities Licensing Exam - Chapter 12

Ay yi yi. The poor testing continues. I am hoping it is just the way this book is wording things that is tripping me up and not the actual material.

I got 7 questions wrong again, even though I felt like I comprehended the material. Really is not like me to test so poorly. 8/15, questions missed were #s 1, 2, 6, 8, 10, 11, 15.

Question 11 was bogus, since there was nothing I read on ex dividends. #8 i knew the answer to but missed due to misreading the choices (75 - 75.25, 800 - 600) means buy, ask, buyer, seller.

In order to trade on NYSE a co must have 100k shares traded over the past 6mos, min 1.1M common shares, Earnings 2.5M, no fewer than 2000 shareholders at 100 shares each.

NYSE can delist you for fewer than 1200 shareholders at 100 shares person, fewer 600k outstanding shares, total market value less than $5M. i answered that their losses would also cause them delisted, but upon realizing I got the question wrong, I do remember reading that NYSE knows companies can weather bad years and get back on track.

specialists maintain a market of certain NYSE exchange securities.

buy stop orders and the scenario surrounding them (usually a short position).

S&P 500 tracks stocks of 500 companies (not necessarily NYSE) and provides a more accurate picture of the market than the Dow.

Securities Licensing Exam - Chapter 11

I think this is the last on munis. Though I have enjoyed the subject matter, I am not testing well enough to pass. I scored 10/15 on the MSRB questions. That's the Municipal Security Rulemaking Board.

I missed 1, 4, 7, 11, 13.

MSRB rules and reg do not apply to the munis themselves.

Municipal apprentices can represent themselves to other brokers, but cannot receive a commission. i didn't think they cld do anything.

when a muni dealer advertises a bond they list the ytm and price of bond on pub date. i didn't chose this option b/c i thought that was only for 2nd offerings.

when campaign contributions are made, i knew the two year penalty. what i got wrng was that the dealer can actually still enter a competitive bid to the municipality. i guess i do not know the difference between a competitive bid and a negotiated bid. they are prvented from bidding on negotiated but can still do competitive b/c in theory municipalities offer these to the lowest bidder.

on the last one regarding discretionary accounts, I didn't think duplicate confirms had to be sent to the clients employer unless the discretionary account was at another broker dealer. the questions did not explicitly state this. but the answer seems to imply that the questions referring to a broker.

Securities Licensing Exam - Chapter 10

I am sick of this, but it is necessary. And it is only necessary if it is necessary. It is. So onward.

Chapter 10. Funny, I am enjoying these chapters on munis, but am testing horribly. IDKY. In other news, my cousin's wife was on Oprah's 25th Farewell Season Favorite Christmas things. She won all kinds of stuff.

Missed 7, scored 8/15. #4, 6, 8, 9, 11, 12, 14.

muni is building a new bridge, so study will be commissioned and the cost of projec needs determined. i said those and muni needs a referendum vote b4 issuing bonds, which is not the case since it is a project and not a GO bond. GO bonds are backed by taxes, which wuld require tax payer vote.

notice of sale has amt, type of taxes backing bond type of bond. no int rate since this is yet TBD during biding process.

writing the scale question i had no idea what that even was so i guessed, but the right answer is assessing market demand for the bond.

lead u/w for a muni u/w synd are considered the syn mgr, make all invstmnt choices, chose the synd members and make a mgmt fee on each bond sold.

management fee vs. takedown fee. still struggling w/this concept.

synd mgrs are responsible for announcing synd's winning bid, closing the books on the sld-out issue, paying synd members there share of the spread, making sure any 1 cust didn't purchase 2 many bonds. not responsible for making a market.

firm offers are the types of quotes a muni bond dealer will make to buy or sell.

Securities Licensing Exam - Chapter 9

This was on municipalities...not nearly as infuriating as tbills and the financial markets. haha.

I got 10/15, which suggests I should have gone to bed earlier than I did. I do remember falling asleep a couple of times.

The questions I missed were 2, 3, 10, 12, 14.

Two of the questions (2,3) were on the nature of munis. They are generally tax exempt from federal. provided they are issued in the same municipality as the user, they are exempt from all 3. i thought they were not exempt from federal taxes.

industrial revenue and industrial development bonds I do not even remember reading about. special assessment bonds i missed b/c i said the municipality backed the bond w/ad valorem tax...b/c there were two answers about how the muni backed the bond, so i figured it had to be one of them...but the false statement was that they are a type of revenue bond. they are GO's and are backed by taxes.

Section 8 munis are backed by the federal government. HUD>I thought that no munis were backed by the Fed...but it is not the FED, it is HUD.

That's all...on to 10, which is really more municipalities.

Also, one of the questions I got right by guestimating which is #15. i just remembered in the example the lady had a 28% tax bracket and the bond was about 5% coupon and the answer to that was around 7%. i did not get this right because i knew the formula...to which i repeat myself, to study and memorize all of the ratio, ytm, adjusted cost rate, rates yields, etc.

Bye!

Securities Licensing Exam - Chapter 8

Man, this chapter took even longer than Saturday's Chapter 7.

This was about agency debt and it made me mad, too. The thought occurred to me that perhaps the reason certain types of instruments were upsetting to me is because they are bad investments.

Here's the ugly truth- got 9/15 right. missed three by over-analyzing. changed my answers when i should have gone w/my gut, which was the right answer. The questions and subject matter I missed:

#1, 5, 6, 8, 13, 14.
US govt securities support farming, education, housing AND foreign trade. I didn't think foreign trade was included; which the govt guarantees FSA (farm service agency), VA and FHA loans. For w/e reason, I wasn't certain about the FSA loan; Bonds issued by FHLBS are NOT callable. that one i just flat missed; GNMA loan income is not exempt from local and state taxes. i knew better on this, I just opted to go with GNMA is a part of the federal government, because i thought it was a trick ?; straight pass through's are backed by the real property underlying the debt, which I knew...I changed my answer to guarantee of the issuing agency; and finally, the greatest risk of pass through certs is the repayment risk, I had chosen interest rates which fuel the risk one way or another, not directly involved in the transaction risk.

That's it. I am glad to move on from this one, although given my score I most certainly will have to read it again. booo. Also, I want to reiterate to study and memorize the YTM, convertible ratio formulas etc. etc.

One good thing about chapter 8 is the PSA (Public Service Association) model. I like that Freddie Mac came up with a formula that accurately predicts the way similar pools of mortgages (i.e. same interest rate same maturity date) behave and when they will refinance etc. I dislike that they used that model to issue CMO's, PACs and TACs. I don't like the ideas of those at all.

The only type of pass-through certificate I think is even sound is GNMA, solely because it is backed by the government. That is not a recommendation, however, just a talking point about the chapter.

God bless.

Series Securities Licensing Exam - Chapter 7

This was a hard chapter to study simply because of the amounts of time I was interrupted, and my direct proximity to the action of the household throughout the day.

I got 11/15, 73%. I believe the passing grade is 75%, so I have work to do. One thing I am realizing is that I need to study the ratios, how to calculate bond yields, things of this nature...anything with a formula.

I got questions 1, 7, 8, 14 wrong. Military expenses are "discretionary" spending and not an "entitlement program" like Medicaire, government securities carry little risk, and are direct obligations of the government. Also, I calculated $14 correctly (semi-annual interest) but I forgot to divide the answer in 1/2 to answer the question.

Just glad to be done with that one. Oh, and I dreamed about interest rates and charts last night. Dapo said that means I am really digesting the information. I said yeah, if I can't think of the answer I will just fall asleep during the exam and wake up with the answer. That sounded funnier when we said it than when I typed it.

Chapter 8 tomorrow. Good night!

Series 7 Securities Licensing Exam - Chapter 6

HATED IT!

I really did. It was on the money market and given Bernanke's recent announcement of the Fed's intent to purchase $600 billion in tbills and I saw how the book said this is the opposite of what he should be doing.

It sounds to me like the money market is essentially a bunch of check kiting with interest. Some of it is okay, like post dating a check ??! (as an aside, this is called a banker's acceptance and used to import goods)

So, it's illegal for you to do it, to your bank, but not for your bank to do it to their bank. Got it?

But the only other alternative it seems is for the Fed to lower the reserve requirement for banks, which would in effect loosen the funds available to lend, increase interest rates and send the economy in the right direction. but then people might realize that the banks are living paycheck to paycheck deposits like the rest of america and don't have the money to lend to each other overnight anymore...so then we'll just print more money, buy more bills, and indirectly boost the amount of money you need to keep on deposit, but since you will have more on deposit, that shouldn't be so hard to do.

In addition, the idea of repurchase agreements got me angry, too.

Now, about that 1.1% CD...

Anyhow I missed several questions and I do care about that. They were #s 2, 8, 11, 13, 15. money center banks must not be members of the Federal Reserve System. #8 was about commercial paper which said which of these is false, and I read which is true and saw that the first one was true and marked it. commercial paper matures 270 days or fewer, is cheaper than borrowing from a bank, usually sell at a discount and are redeemed at par value and usually is only issued by companies with good credit ratings because they are unsecured.

Fed targets the Fed funds rate w/its open market ops. This is not the discount rate (what the Fed loans $ to banks at for overnight loans) but it is the rate that banks loan to each other at (of course, after receiving the loan from the fed to loan to the other bank). AARGH.

banks that need a payday loan (I'm jesting) can borrow in the Eurodollar market LIBOR London InterBank something OR other.

Money Market funds must register w/the SEC because of Cam Newton. OH, wrong SEC.

10/15 . 66 % . FAIL >8(

Securities Licensing Exam - Chapter 5

It may have taken all morning to do this 14 page chapter, but I did it.

My score was a 12/15 but it is very surprising as well as deceptive! I wasn't answering with confidence and don't know the bond ratio, parity prices and other calculations by heart and I was guessing. This is something I'm going to want to study more later.

The questions which I missed, were 9, 13, 15. Eurobonds, who pays interest on a bond sale (the BUYER pays interest on a bond to the seller, but I was thinking the seller i.e. issuer, and I was wrong), and given a choice of bonds which one has the highest market risk. I chose the 30 yr debenture, thinking the one w/ the longest maturity. But market risk also applies for low coupons, and answer D was a 30 yr 5% first mortgage bond. of the two, incidentally, the debenture has a higher credit risk, as the latter is secured by collateral.

I really enjoyed the material in this chapter, if I can just memorize the ratios, how to get parity. Also, I need to get straight which way a bond converting to stock is good. It is good if the stock price is higher than the bond conversion price. Bond conversion price is opposite, I think.

I liked learning about yellow sheets and arbitrage in particular. The material is all new, as are the concepts, which is why I think it is taking me so long to read it.

Securities Licensing Exam Prep - Chapter 4

I got another 12/15, missing questions #6, 7, 15. They were all because I did not read the question well, but topic matters were a bond's coupon, bond maturity date and YTM (Yield to Maturity).

That felt good, two passes in a row, and I would have done better had I slowed down a little.

See you tomorrow, when my goal is to do three chapters (5-7).

Securities Licensing Exam - Chapter 3

I did much better on this chapter! Scoring 9/12 missing questions 7, 11 and 14. The questions I missed were on rights distribution/subscription ratio/subscription price and the market value of the rights, dividends to common stockholders vs. cummulative preferred stockholders (which i knew that they had to make up payments of dividends they hadn't paid to preferred stockholders, I only calculated 2 qtrs, not 3 to include the current qtr), and properties of warrants (I got the two correct, but thought they also had to go NYSE for OTC. this is incorrect, as they go to whatever exchange the underlying stock is registered in).

I feel much better about that chapter!

Clarification

I feel the need to clarify (or reiterate, or initially state) that the questions and answers I am referring to are found within the study literature and not the test itself. I have not taken or seen or have knowledge of the test.

I'm sure that would be bad if I had, and I blogged about it.

These are from the Exam Prep and Exam Answers of the Exam Cram book "Series 7 Securities Licensing Review Exam Cram", c)2006 Que Publishing.

I also feel the need to state that I am not quoting the book, or transmitting it by any means, but rather discussing topics contained therein which are not proprietary to the book and can be found in many public venues such as wikipedia, investopedia, etc.

Securities Licensing Exam - Chapter 2

I did a little better on this morning's studying. Getting 10/16 or 62.5%. This is a good improvement on yesterday's 40% exam, but is still beneath the 75% benchmark needed to pass the 250 question exam.

I missed questins 2, 7, 8, 9, 10, 16 on dual listing (this is a major exchange and a regional exchange...cannot be NYSE and AMEX dual members), I missed two questions on agent commissions and dealer mark ups as I had them switched in my mind (but I have a good way to remember - insurance AGENTS make commissions, car DEALERS mark up the invoice), two questions on upticks and short sales (there was a ticker and when could you short sale...I kept thinking that the share price needed to go down, since that is what a short sale is...but now I realize it has to have a zero plus uptick or uptick in order for the sale to be PLACED. this is to prevent the bear raids), and a question on the definition of an insider in the Insider Trading and SFEA of 1988 which I missed b/c I answered the officer, director and 10% ownership answer...which was either in the 1933 or 1934 act...the 1988 Act changes the insider definition to anyone who acts based on material, nonpublic information.

Securities Licensing Exam - Chapter 1

I got 6/15, missing questions 3, 4, 6, 9, 10, 11, 12, 14 & 15 on stabilizing bids, penalty bid clause (when syndicates dump shares back onto underwriters), commercial paper (as it relates to being exempt from SEC regulation), where equity securities trade in the secondary market (I thought NYSE, but it is actually the exchange the company has been listed with), what the lead u/w in a Public Offering earns for each share sold by the syndicate - management fee. i said u/w spread, who attends due dilligence meetings (issuer, u/w and syndicate. i chose only issuer, u/w), what happens to Western account syndicate when there are shares remaining under the agreemnt (I said selling group required to purchase the shares, but the syndicate is required to place them in their own account - similar concept, wrong type of people), and two questions on calculating management fee points/syndicate members.

I was a little bit shocked to see how badly I did on this as I usually test well. But this is entirely foreign material, with lots of regulations and exceptions and so on.

Series 7 Exam countdown

I began blogging when I was pregnant with Jimi, more as an online diary of sorts than any other thing. Now that I have him, and his sister Lorin, there's less time to do things like write.

However, as I am studying for the Series 7 exam, it strikes me that I may want to be able to go back at some point in the future and see the things that I had trouble with while studying, so as to enable me to re-study those topics. Also, just to chronicle my life as a newbie in the industry.

Before I get into the actual study material, which will be VERY BORING to 99% of my 1 reader, I want to share the story of my journey to become a financial planner. Wow, just realized this might take more time than I want to from studying...so here's the cliff notes:

- While in SLC in 2001 I lost my job, was having a hard time finding one, frustrated, etc. so I talked to my pastor who asked me a most important question, "if you could do anything you wanted to and time, money and education was not a factor...what would you choose to do?" I replied with "I'd be a financial advisor". So he said, begin to find out how to do that.
- I called around and many SLC firms suggested I first obtain my insurance license. I did.
- I also learned that although financial advisor and financial planner were not interchangable terms, I would like to do both of those job descriptions. In other words, act as an advisor within the scope of comprehensive financial planning.
- I realized that most successful financial planners had the CFP
designation, so I began to take the courses to pass this exam (at the time the CFP Board of Standards did not require those sitting for the exam to have a bachelors degree). This would prove to behoove me in more way than one.
- I got married. Not really important in my career path, but important in life.
- I got a job at an insurance company, and later left that company for almost double pay at another company as a financial analyst. I always said once my husband got out of school and got a job, I would try to get into the financial field, but that it's pay was commission and I needed something guaranteed.
- We moved to Huntsville, AL. I proceeded to have two children in 18 month's time. This actually is important in my career path, as your world totally transforms at this point.
- After our daughter (youngest) turned 18 months, we began to re-evaluate me going back to work in the corporate world. The prospect of which just didn't quite sit right with me. I said, "If I'm going to go get a job and put the kids in daycare, then I am going to go do what I feel like I've been put on this earth to do."
- I went around dropping off resumes at LPL Financial, Morgan Stanley/Dean Whitter, Raymond James, and others. My first stop would prove to be the only one that mattered, as I met the branch manager. That is a good thing because the others did not so much as bother to return my calls.
- The good people at LPL agreed to sponsor me to take the Series 7 and 66 exams. I had to fill out a U-4 form, submit last year's tax return, get fingerprinted and other preliminary paperwork such as list my last five years residence, ten years of job references, etc.
- My branch manager said that most people who start out in the industry do so at wirehouses because they usually give you a base pay plus commission (though, the base is actually more like a "draw"). They also have production requirements and product placement policy that goes against what I feel I want to do for clients. He said I am smart because LPL and other independent broker/dealers pay about 90% versus the other b/d I mention which pay around 65%. If the company charges $1/share commission I'd get $.90 versus $.65. That'll add up.
- I began to study. The Dearborn Publishing material that my branch manager and transition specialist is just a tidge expensive ($300 range) so I grabbed a book at Barnes & Noble called Exam Cram for $40. I'm going to read this while I save for the $300 expenditure.

My test date for the Series 7 is December 29th, 2010 at 9am. The Series 66 is scheduled for January 4th, 2011 at 9 am. Prayers are appreciated.