How Diverse Skills Can Help You Get the Lifestyle You Want

This article is an excerpt from the Shortform book guide to "Early Retirement Extreme" by Jacob Lund Fisker. Shortform has the world's best summaries and analyses of books you should be reading.

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Are you a specialist in just one area? If so, are you aware of how that could be holding you back?

Retired astrophysicist Jacob Lund Fisker argues in Early Retirement Extreme that it’s possible to break out of the unsatisfying cycle of consumerism. Part of the equation is increasing your financial security by diversifying your skills.

Read more to discover how diverse skills can help you get the lifestyle you want.

Tips to Develop Diverse Skills

According to Fisker, diverse skills are a key component of the early retirement lifestyle. Most people strive to be highly valued in the labor market by specializing in a single area of expertise. However, if you cover your entire cost of living with the income from a single skill, you’ll be especially vulnerable if that income is disrupted. For instance, if new specialists enter your industry and competition becomes fiercer, you may struggle to hold a job in your field—or earn income any other way.

Rather than creating a life for yourself that depends on you profiting from a single specialty, Fisker recommends building a diverse set of skills. This way, you’ll have the skills necessary to get a job in a wide variety of fields, if necessary, making you resilient to disruptions to any one industry.

Uniquely Valuable Skill Combinations

A diverse skill set is arguably even more valuable to employers than Fisker describes. While Fisker asserts that having a variety of skills is valuable primarily because it lets you get jobs in a variety of fields, others argue that a diverse set of skills is worth more than the sum of its parts.

There are certain things that only people with a specific combination of skills can do. For instance, to be the creative director of a marketing department, you must know how to both craft compelling advertising and manage a team. While professional-level skills are rare, unique combinations of skills are even rarer and are therefore more valuable. If your skill set is unique enough to make you irreplaceable, you’ve guaranteed yourself a level of job security resilient enough to outlast tough competition and other disruptions to your industry.

In addition to diverse work skills, Fisker recommends mastering the daily living skills necessary to fix household problems rather than spending money to have others do so (or on products that do it for you). This helps you further minimize your expenses, making retirement a viable option sooner. For example, if you teach yourself how to paint your house, you won’t have to hire anyone to do it for you ever again.

(Shortform note: Experts have identified which DIY skills are most helpful for minimizing your expenses: Basic plumbing is relatively simple to learn for many people and can save the $75 an hour or so you would have to pay a professional plumber. Free software makes it easier to file your own taxes and save hundreds on an accountant. In contrast, some skills require so much time and money to learn that you’d be better off outsourcing them. Learning to install a new fuel pump in your car, for example, requires such a heavy investment in the proper tools and know-how that it may be worth paying for a professional.)

Here are Fisker’s tips on how to build a diverse, resilient skillset.

Tip #1: Learn by doing.
Tip #2: Leverage increasing returns, avoid diminishing returns.

Tip #1: Learn by Doing

Whenever a problem comes up in your life, try to solve it yourself rather than hire an expert. Fisker argues that hands-on experience is the most effective way to learn anything. If needed, he recommends using books and online resources to teach yourself before your first attempt at solving the problem. Often, people overestimate how difficult it is to do a task yourself—you’ll be able to gain basic competence in almost any skill in a remarkably short time.

(Shortform note: When trying to decide whether to solve a problem yourself or hire an expert, weigh the risk of making expensive or dangerous mistakes. While online resources like YouTube have made learning household skills more accessible, some argue that they’ve also caused people to underestimate how difficult certain tasks are. If you mistakenly assume you know enough to complete a project after just watching one or two videos, you risk doing property-devaluing structural damage to your home, or even seriously injuring yourself if you’re tackling something like electrical work. Consider choosing low-risk projects like finish carpentry instead, at least when you’ve just begun building your DIY skills.)

Tip #2: Leverage Increasing Returns, Avoid Diminishing Returns

In every area of your life, invest enough resources to achieve increasing returns, then stop and invest elsewhere once you begin receiving decreasing returns. According to Fisker, following this guideline will show you how much effort you should invest in each of your diverse skills.

What are “increasing returns” in this context? Fisker asserts that as you invest effort into improving your life in a certain domain, the rate at which you receive benefits like money, health, and happiness increases—each additional hour of effort will gain you more benefits than the previous one. However, this is only true up to a point. If you invest too much time and money in an area of life, they begin yielding diminishing returns. At this point, it’s more efficient to do something else.

For example, learning how to set up a website for your online business may take you three hours and earn you $1,000 a month in online sales. However, learning how to create a slick custom design for your website may take 12 more hours and only earn you an additional $100 a month. In this case, it’s financially efficient to invest enough time in your website to make basic sales (increasing returns), then stop investing time in unimportant web design (decreasing returns) and learn how to optimize your business in other ways. For instance, you could further diversify your business skills by learning how to pull traffic to your website with advertisements.

How to Avoid Negative Returns

Fisker asserts that avoiding diminishing returns is valuable because it lets you do something else more productive—but others claim that sometimes even doing nothing yields more benefits than working more. Mark Manson (The Subtle Art of Not Giving a F*ck) argues that at a certain point, investing effort in a given area of life will not only yield diminishing returns but also eventually yield negative returns. For example, if you spend too long designing a website for your online business, you risk overthinking the design and making it more confusing than it was before, losing sales you would have otherwise made.

Manson contends that, in particular, the majority of creative work eventually yields negative returns. Thus, he recommends limiting your creative work to just a few hours a day and intentionally scheduling leisure time to do nothing productive. This way, you can rest your mind and ensure that the next time you do creative work, your effort will once again yield increasing returns.

Exercise: Make Progress Toward Early Retirement

According to Fisker, to retire early you need to diversify your skill set. Consider how you might make progress toward this goal. Think of a product you regularly buy. What problem are you using that product to solve? If you couldn’t spend money to make the problem go away, how might you solve it yourself? For example, if you’re regularly buying new running shoes when they wear out, you could learn how to repair soles.

How Diverse Skills Can Help You Get the Lifestyle You Want