Which Stone Is The Key?

Jae’s Manifesto Rule #3: Don’t Confuse Commodity With Specialty

The reality is that I spend most of my time thinking: “how can I explain it so that a common-sense person can understand it?” The problem I have created for myself is that people take away the idea that “this is easy, I can do it myself, I can make the judgement myself, unassisted.” This is an unintended, unfortunate consequence. I could simply say “this is too hard for you to get,” but that would be untrue, and the line in the sand is thin, indeed.

Key thing is that the path and guidance to making a decision is the specialty. Making sure the steps occur as they should is a specialty. Helping select one alternative path versus another is the specialty. The follow-up in terms of whether or not expectations are met, and adjustments, is a specialty

The price, and terms and conditions of implementing any component are almost pure commodities, because the prices are not determined by me, the rules are not determined by me.


First, a definition. A commodity is a good where the equivalent substitute can be identified and you can switch easily, at low or no additional financial cost. Hard drive disk space? Commodity.

When communicating with clients, I have frequently said “I’m a waiter here, still or sparkling?” The point is that I don’t control the prices or rules of eligibility, we are pure price-takers. The competitive market sets the prices. Some other party has determined them. It could be the government, it could be an insurance company. Will I receive a commission? In many cases, the answer is yes.

Does the difference in my compensation matter? No, I don’t control the level and the differences are so small, it is a very poor use of time. I don’t even apply for something called the Million Dollar Round Table, which seems to be some self-congratulatory group of financial professionals. Are there sales incentives in the world? Yes. Can I tell you a single detail of any of them? Nah, too busy, I’ve already been to the destinations on my own dime. I can’t speak for others, like I said, too busy for that.

The bottom line is that the end product you actually buy and its price is very usually (not always) a commodity, set by the marketplace. I am able to find another product, made by another company, with nearly the same risks, rewards, and price. I could easily call technology a commodity, the edge may exist, it erodes much more quickly than you might think (why I don’t buy a top-of-the-line computer, the price is going to drop quickly, with better features, at a blink of an eye).

Why? The math used in determining prices largely known, and the world is hyper-competitive. Easy example: the premium for Medigap Plan G, for a turning-65 female can be a price tie, down to the penny. The same thing can be said for term life insurance for a 40 year old female.

By the way, there is a reason that I frankly state that individual and group health insurance is more complicated. That is because the competition is not as fierce (it is getting better, but still not there), and the math is far less transparent.


A specialty is something where substitutes cannot be easily found, at a given price.

For me, those specialties are, in part:

Early retirement made possible because married couple in Florida has the resources to withdraw from post-tax funds, and simultaneously receive over $20,000 in health insurance premiums during the year. This entirely changes the retirement trajectory, the decision of “can I afford early retirement” is now entirely changed.

Small employer, highly-educated, highly-experienced professional is the founder. He tasks the selection of employee benefits to an employee, call her Miss X. One day, Miss X calls to ask me if I have changed the health insurance premium. Sound the alarm, Miss X has no idea that this would be impossible.

Behind the scenes, these look like specialties but are not:

The incumbent broker had set into place a small group plan that cost the employer many $10,000s. That was on price alone, not to mention the fact that the out-of-pocket expenses would’ve been much higher. Further, there were benefits that the employer didn’t have, but should have, at the same price.

Robo-advisors are a commodity, for subscribers to GH2 Unfiltered / paid substack, it is correct to conclude that I am not the only one to understand that automated portfolio construction is a KNOWN exercise.

The list is too long to mention, the effects go largely hidden, unless you know which stones can hide treasure, or trash. Ultimately, this is why DIY fails, you most likely (not always) are unaware of what information is a commodity, and which is a specialty. That leaves you wrongly believing in what service you should pay for, and what service you should not pay for, I have left breadcrumbs, as usual.