The Failure of Specialization And the Rise Of Financially Independent Generalists

Do you consider yourself a specialist or a generalist?  It’s not a question you normally hear people asking themselves.  Most people choose a specialization during college, and try to find work in that specialized field with the hope of earning a good living (and decent retirement).

In general, specialization is a good strategy.  Specialized jobs typically pay more than being a generalist, and the payoffs for greater experience in specialized fields makes it worth it to pursue very specialized skills.

Even the great Charlie Munger believes that being a specialist is the right strategy for most people.  At a recent Berkshire Hathaway annual meeting, he had this to say about specialization:

“I think the right strategy for the great mass of humanity is to specialize.  Nobody wants to go to a doctor that’s half proctologist and half dentist, you know? So, the ordinary way to succeed is to narrowly specialize.”

In our society, specialization and expertise is highly regarded.  Specialize in life, and then reap the financial rewards!  Right?

Not so fast!  Could there also be advantages to maintaining a “generalist” skill set?  After-all, a human life encompasses so much more than just a job!


The Secret Life Of A Specialist

The problem with specialization becomes apparent when it’s taken to the extreme — You focus entirely on your specialization and simply hire-out everything that isn’t within your skill-set.

Imagine for a moment, the life of a young student who becomes a specialist.  Let’s say hypothetically this specialist starts life by going to college and studying to become a Artificial Intelligence engineer (a lucrative and upcoming field of study).

After graduating, our specialist gets hired as a “self-driving car” AI engineer.  Needing to “prove” him or herself to the new employer, our specialist begins their working career by putting in 60-70 hours a week.  Since the specialist has little time to prepare or learn to cook proper meals, he (or she) simply eats-out or purchases takeout every day.  It’s a fast and tasty way to eat, but also unhealthy and expensive.

There’s also very little time available for house cleaning, so our specialist justifies a “lack of time” as a reason to hire a cleaning service.  It’s just another cost that’s expected to be recovered once the higher earnings from greater specialization are realized.

Eventually, it does happen.  After years of hard work, our imaginary specialist manages a promotion at work.  Our specialist can now breathe a giant sigh of relief!  They now have a stable career, and a employer who values their work!

Life is now stable enough to afford a home…. but homes require continuous maintenance and renovation.  There’s also gardening and yard care necessary to keep a home looking good.  Our specialist is still quite busy with work, so they’ll hire out this work because they lack the time, tools, or skills to perform home maintenance.

lawn mower
A true specialist hires out all home maintenance tasks.

Perhaps they don’t even own a lawn mower, so they absolutely have to hire a gardener before the weeds overgrow their home.  (This isn’t made-up — I have a friend with over half an acre of lawn, and he doesn’t even own a lawnmower.)

So far, life is good for our imaginary specialist… but also very expensive.   Work pays well, and he (or she) owns a nice house and nice car, but their savings rate is pretty pathetic.  Maybe the specialist only manages to save 10% of their annual salary.

Not being an expert on investing, our specialist follows the poor advice of a investment advisor, and invests in actively traded mutual funds.  These funds have high fees, but seem to perform decently… so our specialist just keeps plowing his (or her) annual savings into them.

Assuming the market does well in the ensuing years, our specialist can expect to retire at the age of 65.  By all accounts, this appears to be a good average life.

But what happens when specialization fails?


The Failure Of Specialization

The reality of life is that we don’t live in a static world.  The world is always changing.  New industries and technologies are constantly being developed, and old industries are dying out at the same time.

Furthermore, according to a recent study on job-change frequency, young people are now changing jobs faster than ever before.

In the case of our AI specialist, they might wake up one day to a world where self-driving cars decide they don’t like humans anymore, and start killing off all their passengers.  Suddenly people won’t want self-driving cars, and our imaginary specialist finds him or herself out of a job — with not nearly enough saved for retirement, and no DIY skills to speak of.

All that specialization now counts for nothing.  Finding further work in that specialization is now impossible.

terminator ai
While AI is all the rage today, it’s not hard to imagine a world where AI becomes far less popular.

This is the primary conflict that confronts all biological organisms in a world undergoing continuous change — They can specialize to succeed in one ecological niche, but when environmental changes happen, specialists get screwed.

Polar bears are one such animal that’s currently suffering under the failure of specialization.  Polar bears (as you may know) are dependent upon sea-ice for their hunting grounds.  Due to environmental changes, sea-ice levels are shrinking around the globe, which pressures the polar bear population.  Basically, the polar bear is getting royally screwed by environmental changes.

Can the polar bear adapt to a new world without sea-ice?  Only time will tell.


Generalists Do OK

With technology disrupting jobs faster than we’ve ever seen throughout history, there’s growing evidence to suggest that most people are finding it harder and harder to stay in one “specialized niche” for an entire career.

Being able to adapt to a wide variety of these “ecological niches” is one of the chief advantages of being a generalist.  A generalist keeps a wide skill set, and can do well in many environments.

So why not just be a generalist?

Being a generalist has advantages, but a General Studies degree isn’t going to land you a great job right out of college.  Companies *want* specialists.  To some extent our society and culture now require specialization.

Fortunately, there’s no rule that says you have to maintain a single specialization your entire life.  Instead of spending your life specializing in one skill set, a generalist can still utilize time outside of work to develop a broad set of skills.

Those new skills can even lead to new jobs, or help save significant money over your lifetime.  That money, compounded over time, can make a HUGE difference if you suddenly find yourself without a job or hunting a new career.

What kind of skills am I talking about?

Cooking Skills — Absolutely everyone has to eat, and learning to cook well is a fantastic skill to learn.  Not only can this skill save significant money over a lifetime, but you’ll typically eat far healthier than someone eating at restaurants all their life.

Home Repair And Renovation Skills —  Instead of hiring out a contractor to do home repairs or renovations, you can do much of this work yourself and save a ton of money!  From woodworking, welding, painting, electrical, or even plumbing, there’s a TON of areas you can learn that involve some kind of construction or repair… and typically the tradespeople who sell this kind of work are highly paid.  You’ll be saving a bundle!

Investing Skills — This is a skill set that I firmly believe everyone should develop!  Absolutely everyone should have a decent understanding of how to be a DIY investor.  There’s plenty of books where anyone can learn the basics of investing.  With a little effort anyone can learn enough about investing and finance to put themselves ahead in the game of life.

Auto Repair & Maintenance Skills — Being able to repair and do basic maintenance on your car is an incredibly useful skill to have if you plan on owning a car.  Simple tasks like changing oil (and other fluids) or swapping light bulbs aren’t really all that hard, but they will save you significant money over handing over your car to a dealership to do all the work.

Really, the skills you develop outside of work can be anything — photography, programming, painting, video editing, or even mountain climbing.  You never know when a hobby skill could turn into a side-hustle or even a second career!

A generalist builds and develops these skills over a lifetime.  Not all of them are going turn out to be financially advantageous, but they will contribute to creating a well-rounded individual that can adapt to change when it happens… and that’s really the key:  Your ability to adapt.

“After all, it is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”

Knowing this, I’ve always made it a habit to keep growing my skill set outside of work.  Having a wide variety of skills allowed me to quickly adapt to career changes when it was necessary.  My career was pretty turbulent too — Every few years I was changing jobs either by choice or by necessity, and I still managed to do OK.


Final Thoughts

OK, we need to face some very real facts here:  Jobs are no longer the stable, career-long affairs they once were.  Those days are long gone.

Young people today can’t rely on the deep specialization that made their parents and grandparents successful.  The world is too turbulent now, and technology and jobs are changing too frequent.  Specializing is just asking for career difficulty.

Yet young people still need some kind of financial stability while they job-hop or develop the skills for a new career.  (They still have to pay the bills after-all.)

This is where I believe being a “financially independent generalist” can have significant life advantages.  On one hand, you have the financial resources to exist without a job for significant periods of time.  On the other hand, you also have the generalized skills to adapt faster than someone who completely specialized.

It’s a win-win formula that might just be a new model for success in our ever changing world.

What do think?  Are you a specialist or a generalist?


[Image Credit: Flickr1, Flickr2]

16 thoughts on “The Failure of Specialization And the Rise Of Financially Independent Generalists

  • May 29, 2019 at 1:31 PM

    Interesting post and some good things to think about here. I definitely gained the skills in my field to be a specialist. But while working as a specialist I purposely expanded my skills to other areas. So I’d say I’m really a generalist with the ability to specialize in a few things.

    I definitely don’t hire out tasks though. I enjoy being self sufficient.

    • May 30, 2019 at 10:32 PM

      I think it’s OK to specialize for work, but we should all strive to be generalists *in life*. I think most people need to be a little more self-sufficient, and rely less on outsourcing.

  • May 29, 2019 at 1:59 PM

    I think one of my favour quotes applies:

    A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.

    -Robert A. Heinlein from Time Enough For Love

    One wag’s analysis of the list ( not me 🙂 )

    Looking at it, I think that I can measure myself:

    Change a diaper – Done
    Plan an invasion – if it is an invasion to a prison, I am your man, otherwise, the knowledge is theoretical.
    Butcher a hog – Does a chicken count? I was an assistant butcher about twelve years ago. After a while, I felt like a chicken gynecologist.
    Conn a ship – Only if it is directly to the rocks.
    Design a building – Got to sit down for that one as well.
    Write a sonnet – but only a bad one.
    Balance Accounts – Done
    Build a wall – I can also paint it, lay a roof and floor and I am a whiz with removing walls.
    Set a bone – Put it under maybe, the only chance I had was mine, and I mostly cried at the time.
    Comfort the dying – Pass
    Take orders – Done
    Give orders – Done
    Cooperate – Done
    Act Alone – Done
    Solve Equations – Not recently, and I wouldn’t want to do it at gun point, but done.
    Analyze a new problem – Yes
    Pitch manure – Done, and no further comment
    Program a computer – Obvious, isn’t it?
    Cook a tasty meal – I simply adore my onion & garlic omelette, with a side of cream – yummy.
    Fight efficiently – Hmm, I want to say yes, but I never profiled it.
    Die gallantly – ask me again in a century or two

  • May 29, 2019 at 2:37 PM

    I’ve always wanted to be a generalist, and I’ve looked with some concern at a number of friends who’ve become super specialists. Many of them have done extremely well, but a few of them are near-extinct polar bears. Being a generalist is more risk-averse and flexible, and when you’re worried about the down scenarios and OK not being a billionaire, it’s the better strategy methinks.

    • May 30, 2019 at 10:29 PM

      I think the super-specialists that are doing really well today might be kidding themselves. Imagine them as Walmart, earning big profits and kicking small retailer’s ass. Just on the horizon is this little online retailer named Amazon. That freight train is coming for ’em.

      Eventually the big money always dries up. Either due to age (that industry likes younger workers), competition, or obsolescence.

      Recent stats on high-income earners has shown that they can’t maintain a top level income for long.

  • May 29, 2019 at 5:02 PM

    My profession definitely has distinctions of specialists and generalists. Specialty residencies typically add another 2 to 3 yrs of training and not always guarantee a higher income (the the majority of time they do).

    You can also pigeon hole yourself into a very small niche and force to live in a place you may not have cared to or is more expensive because a LCOL area simply does not have the patient base to support a highly specialized doc.

    And you are spot on about shifts with time. Radiology currently is a very highly compensated and desired specialty but there is already concern that we may be replaced with AI in the not too distant future.

  • May 29, 2019 at 5:14 PM

    Definitely agree with you, it’s good to have skills. I have one of the old school government jobs with a pension but I swear they are trying to kill me through overwork, so I don’t collect the pension ; ). I have broad analytical skills and the ability to lead, follow and problems solve, all good things. I can cook somewhat, as far as the other skills go, the time isn’t there-priority is small child and elder dependents. You can have it all but not at once?

    • May 30, 2019 at 10:24 PM

      Right! You can have anything, but not everything … as Paula Paint once said.

  • May 30, 2019 at 6:32 AM

    Interesting take. I think the specialist still do very well. The job security is much higher if you’re really good at a niche. Specialists can adapt too. They can learn to cook and mow the lawn. These generalist skills aren’t that hard. It’s easy to do, but difficult to master.
    Anyway, I heard the polar bears are moving into towns. They go through the dumpsters to get food. Specialists will have to adapt if they have no choice.

    • May 30, 2019 at 10:23 PM

      What you’re describing Joe is a specialist that learned to be a generalist. I’m not saying that specialists can’t adapt. I’m saying they really *should* adapt by building a better skill set before the ice melts.

      Polar bears may learned to eat out of dumpsters, but it’s not a viable long term alternative. Just like if you start eating out of your neighbor’s dumpster, the cops are going to show up one day.

  • May 30, 2019 at 2:21 PM

    I was a “general specialist” when I finished University with degrees in Accounting, Economics, and Finance. I wanted to be able to do a lot of things so it would be difficult to outsource my work overseas or to machines/software. I became something of an amateur programmer over time as there was always demand for someone who could split the difference between bookkeeping and IT and speak both languages. I also picked up some investing skills and retired on 5OCT2012 shortly after my 40th birthday. Now I’m a true generalist as I gain nothing from further specialization.

    I’m with you that more people need to at least somewhat “broad” in their skillsets to allow them to cope with the only constant in today’s employment world: “change.”

    -1 points for you b/c this post contains no pictures of delicious food!

    • May 30, 2019 at 10:34 PM

      I’ll be sure to include some in an upcoming post!

      • May 31, 2019 at 9:44 AM

        I showed you how easy it is on Twitter! ;-p

        Skillet grilled fish using half a stick of butter for lubrication. Added 1/8th cup of whiskey for flavor. Add thick slice of red onion, sliced Roma tomatoes, sliced yellow squash, season with lemon and pepper. Serve with a thick slice of Italian loaf bread (to drink up the fluid!), Tony Chacheres seasoning, grated Parmesan, and a glass of white.

        Delicious. Not as “pretty” as the pix you take though.

  • May 31, 2019 at 5:19 AM

    Definitely a generalist. My title at my current company is literally “TBD”. I do a little bit of everything, from managing employees to data entry to sales.

    Very thought-provoking article. I had an exact conversation with my wife on this topic last week. Really appreciate you sharing your insights!

  • June 1, 2019 at 9:00 PM

    I am in my 4th career change and have been working only for 8 years. The commonality is law. The first 3 were change in area of law. Now I am a consultant. Being a generalist hurt me when I applied for more specialized jobs and was passed over with people with more specialized experience. Being a consultant has been the biggest change yet, learning curve steep but by far the most satisfying job yet. Also in an industry that is growing. Things change so fast. I think to survive nowadays, you have to adapt.


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