REMEMBER THE OLD joke about the efficient markets theory? An economics professor and a student are walking across campus, when the student says, “Look, there’s a $100 bill on the path,” to which the professor replies, “That can’t be true, because somebody would’ve already picked it up.” I’ve been thinking about that joke not because of the efficient markets theory, but because I’m amazed at how many smart people walk by a $100 bill every day. These folks have their emergency savings in an online bank, which right now might pay 0.5% interest. Many brick-and-mortar banks are paying one tenth that amount. Meanwhile, Series I savings bonds (don’t roll your eyes) are currently offering 1.68%. That’s an extra $118 in annual interest on a $10,000 emergency fund. Friends will debate which exchange-traded fund is better based on a one basis point (0.01%) difference in fees. You’d need more than $1 million invested for one basis point to amount to $118—and yet could make that much extra simply by moving $10,000 from your online bank to an I savings bond. For those not familiar with I bonds, they’re a type of U.S. savings bond that’s guaranteed to keep up with inflation. The Treasury Department introduced the I bond in 1998. When you buy one, you get a fixed rate that’s set for the life of the bonds. Currently, that fixed rate is zero, which doesn’t sound very appealing. But on top of that fixed rate, you get inflation protection. To compensate for inflation, I bond holders receive a semi-annual interest rate that changes twice a year. Currently, it’s 0.84%. If you multiply that semi-annual interest rate by two and then add it to the fixed rate, you get the annual interest rate, which today is 1.68%. Like all Treasury instruments, I bonds are backed by the full faith and credit of the U.S. government. [xyz-ihs snippet="Mobile-Subscribe"] The interest on I bonds is state tax-free. The interest can also be federal tax-free if you cash in the bond in the same year that you pay for higher education, though income restrictions apply. What are the downsides? First, you have to hold an I bond for 12 months before you can redeem it, so you don’t want to invest all of your emergency savings right away and, instead, you should buy your I bonds gradually. If you redeem your bonds before five years have passed, you forfeit three months of interest. Second, you’re limited in how much you can invest in I bonds. Each year, you’re allowed to directly purchase no more than $10,000 of I bonds. If you’re due a refund on your federal income taxes, you can also use that money to purchase an I bond, but only up to $5,000. The upshot: An individual can purchase $15,000 of I bonds per year, while a married couple is limited to $25,000, comprised of $10,000 each, plus up to $5,000 using their income tax refund. The third issue isn’t really a downside, but rather something you have to get used to. Your broker can’t sell you I bonds. You can’t buy them on a secondary market. You can’t buy them from a bank (though your local bank may cash in your savings bonds for you). Instead, the only way to purchase I bonds are either with your tax refund or directly from the Treasury through TreasuryDirect.gov. The website is user friendly. In about 10 minutes, you can set up an account, link it to a bank account and schedule the purchase of your first I bond. Result: You might spend 10 minutes and make $118 in extra interest. Kenyon Sayler is a mechanical engineer at an international industrial firm. He and his wife Lisa are extraordinarily proud of their two adult sons. He enjoys walking his dog, traveling, reading and gardening. His previous article was Home Free. [xyz-ihs snippet="Donate"]

I'M RETIRED, BUT I KEEP fairly busy. From January through April, I volunteer at AARP, helping folks file their income taxes. From May through October, our vegetable garden keeps me occupied. That leaves November and December as a slow period. There’s some volunteering that I do, but nothing that fills up large amounts of time. This year, I thought I might try some seasonal part-time work to keep myself occupied. Retailers usually need help during the holiday season. I’m sure that I could have gotten a higher wage if I’d applied to work for one of the big discount retail chains. But I really didn’t want to be too stressed by large volumes of customers, so I limited my job search to a few stores that I thought would need extra staff but wouldn’t be swamped by huge crowds on Black Friday. The experience reminded me of three things. Although I knew each of them, it was good to get a refresher. First, resumes still matter. At first, I slightly modified my current curriculum vitae (CV), stating that I wanted a seasonal, part-time retail position, but I left my work experience unchanged. I got soundly rejected by potential employers. Maybe it was discrimination because of my extensive work history. Maybe they thought I was overqualified. It really doesn’t matter—it wasn’t working. I changed my CV. I showed only five years of experience and, instead of saying that I was a manufacturing director, I said I’d been responsible for customer satisfaction. Customer satisfaction was certainly part of my previous job description, just not my only duty. Suddenly, I got more calls from employers, including an employer that had previously rejected me based on my old CV. Second, culture matters. I took a job at a national bookseller. Everybody was very nice to the new guy. I was wondering if this was just lucky happenstance or something that the manager worked to achieve. I found out one day when I had a problem. I thought a customer had a gift card that she was trying to redeem. I couldn’t get the gift card to be accepted, so I sent the customer to another cashier. I warned the cashier over the radio of the issue that I was having, and asked him to let me know what he did to get the card to work. A few minutes later, my colleague radioed me and told me that the person was trying to buy a gift card, not redeem one. I thanked him for letting me know. Being of relatively thick skin, I thought nothing more of the exchange. But then I heard the manager come over the radio and gently suggest to my coworker that perhaps his response had been a bit too sarcastic. Obviously, the manager was working to make sure all discussions were professional and respectful. Third, work is just a way to exchange our time for money. I’d taken the job to meet new coworkers, learn a bit about the book trade and stay out of my wife’s way for a few hours each week. I wasn’t working for the money. But it still affected my thinking. Our dog had a minor medical issue that required a trip to the veterinarian for some pain medication and antibiotics. The vet’s bill came to 20 hours of working. My wife reminded me that I wasn’t paying the vet bills with my current job. Still, I found myself converting all sorts of expenses into the number of hours I’d have to work to pay for them.

BEHAVIORAL ECONOMISTS tell us that we’ll get more satisfaction if we spend our dollars on experiences rather than on purchasing possessions. But what if the purchase allows us to have an experience? Buying a bike, for instance, allows me to take a ride with my sons. That raises the question: How much do we need to spend on equipment to get the maximum benefit from an experience? I got a glimpse of the answer to that question several years ago as I was walking out of the office on a Friday. The company’s lab director was leaving a little early, as was I. We talked a bit about our weekend plans. He and his wife were heading to Minnesota’s Boundary Waters for a weekend of canoeing. I was taking my sons and a group of Boy Scouts canoeing in a similar area. It struck me that the lab director was transporting his Kevlar canoe using his new Lexus, while I was taking a factory seconds rotomolded canoe on top of my 10-year-old Chevy. But we would both be sleeping under the exact same summer sky. We would each hear the laugh of loons on the lake in the morning. We would each enjoy the company of our companions. To have an experience, there’s some sum of money that needs to be spent on things. But once the basics are covered, there’s sharply diminishing returns on the additional dollars spent.

AT THE FIRST Berkshire Hathaway annual meeting I attended, Charlie Munger was explaining an investment that the company had made. He said it was likely to provide satisfactory returns. At the time, that seemed like an odd statement. Satisfactory? Not great returns. Not market-beating results. Not returns of 10% or 15% per year. Not even market average performance. Just satisfactory. Since that meeting, I’ve come to appreciate satisfactory returns. Satisfactory covers a wide range, everything from beating the performance of Treasury notes to bragging-around-the-office-coffee-pot returns. It also allows me to keep holding my portfolio. For the past 30 years, I’ve had a significant small capitalization and foreign stock tilt. With U.S. large-cap stocks on a tear over the past decade, it’s been a tough period for a portfolio with such a tilt. Friends question my asset allocation—as well as my sanity. I do believe that small-cap stocks will outperform over the long haul. I also think it’s better to pay less for future corporate earnings rather than more. Since most foreign stock markets have a lower price-earnings ratio than the U.S., I believe that performance across markets will converge. That could mean that foreign stocks soar or U.S. stocks struggle. It doesn’t matter to me. Either way, I’ll see some benefit from diversifying globally. Unfortunately, we may not know if my convictions are correct for another three or four decades. Both small caps and foreign stocks have had long periods of underperformance. It could turn out that having these two tilts will look brilliant. Or it could look like a huge mistake. Over the past decade, my portfolio has underperformed the S&P 500. But I’m okay continuing to hold it because the returns have been satisfactory. We’ve sent our children to college. We’ve retired on our own timeline. Life is good. I’m satisfied with satisfactory returns.

WE BOUGHT A SAILBOAT and trailer in 2008 for our son for his 15th birthday. At the time, he was too young to own a boat, so I registered it in my name. Fast forward 15 years, and we finally got around to transferring the title to our son. Transferring the boat was quick and easy. Transferring the trailer was not. Cars, trucks, boats and trailers all have unique vehicle identification numbers, or VINs. In this case, it’s a 17-digit number. The first number of the VIN engraved on the trailer is a five. The seller sent in the title transfer paperwork, which included the VIN number and which I signed. Two weeks later, I got the title from the state. Everything was correct, except the VIN started with a four—something I didn’t notice at the time. When we tried to transfer the title to our son 15 years later, we discovered the state had ownership records for the various VINs—but I wasn’t listed as the owner of any of them. Compounding the confusion, the state upgraded its computer system in 2008, and it’s now difficult to get information from that time. Fortunately, I still had the original bill of sale, the original title transfer, and the title that I'd received from the state. The state asked me to produce: A photo of the trailer’s VIN A photo of the license plate Photos of each side of the trailer, both a hard copy and a digital file A statement of how I came to own a trailer with no previous transfer of title on record, with the statement also signed by the original seller Fortunately, I'd purchased the boat on consignment from a well-known boat dealer that’s still in business. When I showed the boat dealership all of the photos and original paperwork, an employee had no problem signing the statement.  I took all of this information to the license center. After about an hour consulting with the department of motor vehicles, calling the seller and running a background check on me, the license center was able to give me clear title to the trailer. All told, I spent about six hours cleaning up the mess. If I had to do all of this for a trailer, I can't imagine what an ordeal it would have been for an automobile. Needless to say, I'll be double checking the VIN on any future purchases.

YOU PROBABLY RECALL many firsts: Your first car, your first kiss, maybe even the first stock you purchased. Firsts are exciting. Firsts are easy to demark. You’ve never purchased an item before, so—when you do purchase it—it’s a first. By contrast, lasts sneak up on you. There’s always a chance that you’ll replace an item one more time. My wife has caused me to start thinking about my lasts. This winter, my 36-year-old winter mittens finally wore out. In fairness, it was the outer mitten that wore out. I’d earlier replaced the wool liners three times. When I went looking for a new pair, I was startled by the $80 price tag. My wife said, “Don’t worry about the cost. This will be the last pair you’ll ever buy.” That shocked me. But realistically, in 36 years, I’ll be replacing this pair of mittens when I’m age 98. Assuming that I’m still around, I’m less likely to be doing winter camping or walking the dog in the dead of winter, so she’s probably correct. This will be my last pair of mittens. Our 26-year-old CRT television finally wore out. The replacement TV I purchase may be the last TV I’ll ever buy. If a new one lasts as long as my old one, I’ll be age 88 when it’s time to get a replacement. True, the odds are a bit better that I’ll need a new TV than a new pair of mittens—but not much. It can be a bit depressing to count down your life by the list of things that you’ll never need to purchase again. Still, I disagree with my wife on one item. She has said that our current dog will be my last dog. I’m only willing to concede that he will be the last dog I get while married to my first wife.