What can CFA candidates learn from ‘The Parable of the Talents’

The Parable of the Talents is one of the well-known parables of Jesus.  In the parable, the talents refer to the money (gold). But it can be equally applied to other talents as well. The CFA candidates can learn a lot from the story. The story goes like this:

The Parable of the Talents

Again, it will be like a man going on a journey, who called his servants and entrusted his property to them.  To one he gave five talents of money, to another two talents, and to another one talent, each according to his ability.  Then he went on his journey.  The man who had received the five talents went at once and put his money to work and gained five more.  So also, the one with the two talents gained two more.  But the man who had received the one talent went off, dug a hole in the ground and hid his master’s money.

After a long time, the master of those servants returned and settled accounts with them.  The man who had received the five talents brought the other five.  “Master,” he said, “you entrusted me with five talents.  See, I have gained five more.”

His master replied, “Well done, good and faithful servant!  You have been faithful with a few things; I will put you in charge of many things.  Come and share your master’s happiness!”

The man with the two talents also came.  “Master,” he said, “you entrusted me with two talents; see, I have gained two more.”

His master replied, “Well done, good and faithful servant!  You have been faithful with a few things; I will put you in charge of many things.  Come and share your master’s happiness!”

Then the man who had received the one talent came.  “Master,” he said, “I knew that you are a hard man, harvesting where you have not sown and gathering where you have not scattered seed.  So I was afraid and went out and hid your talent in the ground.  See, here is what belongs to you.”

His master replied, “You wicked, lazy servant!  So you knew that I harvest where I have not sown and gather where I have not scattered seed?  Well then, you should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest.

“Take the talent from him and give it to the one who has the ten talents.  For everyone who has will be given more, and he will have an abundance.  Whoever does not have, even what he has will be taken from him.  And throw that worthless servant outside, into the darkness, where there will be weeping and gnashing of teeth.”

– Matthew 25:14-30 (NIV)

The candidates can learn a lot from the above parable. Below are the few essential learning lessons which CFA candidates can take from it:

(1) Everyone has a different starting point. It’s not about the start but the end that counts: Each servant had a different starting point. But at the end, they were rewarded because of their gain over the starting point and not overall wealth. The story would have been more interesting if the servant with five talents would have done nothing instead of the one possessing only one talent. The parable wants to bring home the point that one should not crib over the start. Rather than wasting time on lack of talent or resources, one should make full and efficient use of the resources.

Every CFA candidate has a different starting point. Many candidates have a prior finance background, many don’t have any finance background. Many are working full time while others are not working at all. Many have other exams or responsibilities as well along with the CFA exam while others have only the CFA exam. But one should not just give up saying that it’s too much for them. They are already way behind the race. They can’t succeed. Confucius says : “He who says he can and he who says he can’t are both usually right”. If you think that you can’t succeed then you shouldn’t have registered for the exam.

Whatever be your starting point, the thing which matters the most is the end result i.e. whether you’ve been able to succeed in the exam or not. The gain in always incremental. If the candidates invest their time in learning rather than cribbing over the lack of things, there is a high probability that they will succeed.

(2) Don’t become complacent: In the story, the first servant didn’t become lazy. He had got five talents. Even if he hasn’t worked hard, he would have been ahead of the other guys. But still, he worked equally hard like the second servant. Similarly, the candidates with a prior background in finance, should not become complacent and stop studying thinking that they know everything.Remember that more is expected of those who have more. The candidates with a prior background in finance should help other guys in clearing their concepts. The knowledge increases with sharing. The knowledge is like seeds of trees. If the seeds are not spread over the fields and kept into a room, they will eventually become worthless. While the ones which are spread and sown in the fields, will blossom into large trees giving fruits and shade.

I have seen many candidates who even after possessing many talents, failed to clear the CFA exams and eventually gave up their dreams of becoming a CFA charter holder in between. The servant with two talents with little bit more effort will eventually catch up with the servant with five talents. Even in the story, both servants were treated equally by the master. They were treated equally because both performed according to their strengths and talents. In the CFA exam, if you perform according to your talents and put adequate required efforts, then no one can stop you in clearing the exam.

The candidates with more skills can be better off by helping other guys. This will not only help themselves to understand the subjects more clearly but they will also make lifelong friends in the process. In the process, they will increase their talents and there will be a lot of abundances and everyone would be better off because of it.

(3) Get out of your comfort zone: The master reprimanded the third servant even though he returned all the money back safely. It was because of the reason that third servant remained in his comfort zone and was afraid of the fact that he might lose that money or talent as well. He would have been appreciated by the master even if he would have lost that talent. the master called him wicked and lazy because he didn’t use the talent given to him.

All of us are given one or other talent. But we generally ignore those talents and always underutilize them. To get the most of your talents, you should get out of the comfort zone. There is one saying which goes like: “If you want something you’ve never had, then you’ve got to do something you’ve never done.” To succeed in CFA exams, you have to do something extra which is needed for the exam. The servants even if they would have lost their talents, would have been rewarded by the master because they kept faith in themselves and tried for achieving more. The CFA candidates should also get out of a fear zone. Don’t ever think that you’re going to fail. Just think about the learning. You will learn a lot during the process. Failure and success are just a stepping stone. Eventually, you will succeed if you keep faith in yourselves and pursue your dreams with full focus.

(4) Make the best use of your talents and create abundance: In the parable, the first and the second servant made the best use of their talents. They both earned 100% return on their investments. It was not mentioned that they were to keep the earned the money for themselves. But still, they worked hard and earned for their master. Their true reward is to share in their master’s happiness.  So happiness is the reward, and happiness comes from serving others.

The CFA candidates can also help and create a win-win situation for all. Life is not all about competition. The actual success in life is not to gain certifications and high paid jobs. The success lies in the happiness which comes from serving others. Why should we miss any chance to serve others? Share your learning with everyone. It will create a suitable environment for all and eventually everyone will succeed. The guy helping others the most will gain the most in the process as he/she would be knowing almost everything about the subject. More opportunities will come to the guy who will help others without expecting any reward and his/her business will grow so much that it would be very difficult to manage that.

I hope you learn something from ‘The Parable of the Talents’. If you apply this in your life, I am sure you’ll do much better. Wish you all the best.


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One thought on “What can CFA candidates learn from ‘The Parable of the Talents’

  1. […] the curriculum. They can revise and practice in the last month. However, the should not get complacent knowing that they have an edge over the working professionals. Most of the times, results tell the […]

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A blog of the NYU Colloquium on Market Institutions and Economic Processes

Fundoo Professor

Thoughts of a teacher & practitioner of value investing and behavioral economics

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