I made the mistake of starting to reread Jacob Fisker’s “Early Retirement Extreme”, and it has me fired up on a few things.
One of the best points made in the book, in my opinion, is that specialization can be represented as a narrow but tall curve on a grid where the x axis represents the breadth of knowledge and the y axis represents the depth of knowledge. Conversely, a generalist can be represented as a broad but shallow curve on the grid. The idea is also presented that a highly resilient lifestyle would include not so much one particular skill in which one is highly specialized as a number of various skills that have been developed to the point of being able to earn money from them.
When demand shifts, the value of specialization is largely wiped out, and the effort of gaining such specialization stops being economically viable, forcing the specialist to invest heavily in a new specialization. However, when demand shifts, the value of generalization remains largely intact and relevant.
I see a lot of fragility build into people’s lives. They can do their one job really well, but they are often helpless to change their tie rods. They know how to build complex payment systems with software, but can’t fix their own toilets. [To be fair, I’m not particularly versed in plumbing, I’m just throwing some examples out there]
And there’s no shortage of “business” books advising you how if you aren’t outsourcing skills, you’re wasting time, as if every waking hour was spent earning money (fucking hell, these people…). The downside to this is that you only know one thing – your job – and nothing else, and become even more dependent on it so you can pay other people for all of the other things you need in your life. The moment a recession decides that your job is redundant and you get laid off, everything starts to collapse and you start losing a lot of sleep. This is part of why I don’t read business books.
Now the thing is, specializing usually pays better than generalizing. Parents encourage their kids to go into “well-paying” occupations, because I guess life is just too hard if you don’t have a 5 bedroom 4.5 bath house and a Lexus. You can’t possibly live comfortably without those things, right? And we use the phrase “jack of all trades, master of none” to criticize people who don’t specialize. Really, this just reveals how egotistical our society is, and how often we equate what we do with who we are. And everybody wants to be special.
I would know, too – I spent well over a decade trying to be professionally smart in something, anything, trying to establish some sort of identity around it. Every effort has been absolutely thwarted, and perhaps for the better, because you are not what you do, and building your identity around what you do can be dangerous and misleading.
What’s amazing, too, is that even people who do earn a lot of money from their specialization often take this for granted. The successful lawyer could pay off a modestly-sized house in just a handful of years, but instead, most successful lawyers buy multi-million dollar houses on a 30-year note. Of course, if they lose their job, it becomes a crisis, because there is no way they can pay all of their insane bills without employment in their specialization. And this happens at every income level, too, but it’s especially hilarious sad with higher incomes. Like…you were given a golden ticket to a financially stable life, and you blew it on junk and luxuries. Just absolutely pissed it away. People should realize that while specialization can pay a lot, it’s inherently fragile, especially if it’s your sole source of income. And don’t think that investment properties are going to save you, because the moment you experience a long vacancy, you’d better hope your salary can cover the extra.
Houses and cars, man. You got to watch out for that stuff.
I write about this a lot, but I feel like I’m constantly fishing for the right words and failing. What people consider normal is usually a house of cards. And it’s sad, because people’s lives get ruined by this all the time, but we accept it because it’s normal.
And I want to maximize my income, too. I’m still human. The more I can earn, the sooner I can potentially reach financial independence, etc. But it comes at a steep price. Moreover, I’m starting to think I’m a generalist at heart. I already have a lot of experience as a software developer, but I’d like to earn certifications in network administration and system administration as well, in addition to cyber security. I love the idea of being able to switch among various jobs at ease, which you can do, but it comes at the price of giving up specialization, sometimes giving up higher pay, and letting go of having something attached to your name. I love learning, and I hate getting bored when I run out of things to learn on the job, so I really think the path of the generalist is for me. I honestly can’t expect to excel too far with software when it consistently becomes boring at the 2 year mark. I just have no passion for that.
Some people might say, “Yeah, but how can I possibly buy a house without the money from specialization, huh?!” First of all, people need to stop thinking about home ownership as the end-all be-all of life. The more you spend on rent, the more you probably feel you are “throwing out” – I totally understand this, and everybody talks about it – but I’m amazed at just how deep the subject actually goes if you dig into it. The problem is not the house so much as it is all the hidden costs of owning a house. Whether that works for you depends on a solid dozen factors, which are incredibly difficult to keep at the front of your mind when having a conversation on this. (It’s worth having though)
When I left my job, I still wasn’t earning 6 figures, but I was damn close. And even then, when I bothered to look at house prices in the Denver area, I could only cringe. Especially for professionals, you have to ask yourself, from a broad perspective, what actually are all my skills accomplishing for me? Because if it means debt slavery for 30 years, I don’t know, I would just feel kind of ashamed that my skills hadn’t done more for me. If that’s what you have to do to live, so be it – there are definitely worse options, but you’d think that in such an advanced society that life could be easier, and I contend that it can be, if you recognize what that truly looks like. And obviously, everybody is to some extent at the mercy of broader society and the going-rates for things, but that doesn’t mean you should do what everybody is doing when it clearly doesn’t work (or at least, not very often).
Again, for most people, losing a job is a greater systemic threat then simply not earning as much. I know plenty of people earning less than I did who are doing just fine, and are way better with money than I am. Except at very low incomes, the issue is rarely money and far more often mindset.
The more concentrated your specialization, the greater the risk of your skills becoming obsolete. If you’re going to specialize for the money, make sure it’s working for you, and not simply filling the coffers of banks and businesses. I don’t think life has to be nearly as complex as we make it, but we fall into the trap of letting luxuries become needs. Now that I’m at the end of my cash for my year off and starting to dip into my Roth contributions, it occurs to me that I have gotten far too comfortable spending money on crap. Fortunately, though, the 401k makes sleeping at night very easy, though the goal is not to withdraw any of that.