One thing I never realized until this weekend was that the SIPC insurance your brokerage firm provides is not just by account owner. Each "separate capacity" is protected up to $500,000!
From the SIPC website:
SIPC protection of customers with multiple accounts is determined by "separate capacity." Each separate capacity is protected up to $500,000 for securities and cash (including a $250,000 limit for cash only). Accounts held in the same capacity are combined for purposes of the SIPC protection limits.
Examples of separate capacities are:
- individual account;
- joint account;
- an account for a corporation;
- an account for a trust created under state law;
- an individual retirement account;
- a Roth individual retirement account;
- an account held by an executor for an estate; and
- an account held by a guardian for a ward or minor.
The following are examples of separate accounts:
- Mary has an account in her name at her brokerage firm. Mary is protected by SIPC up to $500,000.
- Joe has two brokerage accounts, each in his own name. For purposes of SIPC protection, Joe’s accounts are combined, and Joe is protected by SIPC only up to a total of $500,000.
- Joe and Mary are married and they have a joint brokerage account which is separate from the individual accounts that they each have at the firm. An additional maximum of $500,000 of SIPC protection is available for the joint account.
- Joe has a Roth account and an IRA account, at the same brokerage. Joe is protected up to $500,000 for the Roth account and up to $500,000 for his IRA account.
The more you know! Hope that knowledge wasn't super obvious to everyone but me and helps someone!
A bit less fun fact, SIPC is generally not automatic, you need to file, whereas FDIC is automatic. That said, most brokerages will do everything they can to make you whole w/o going through SIPC, so it probably doesn't matter in practice unless there's a severe issue involving both the brokerage and the funds you're invested in.
Happy Friday everyone!
Today happens to be payday for me, and I was updating my spreadsheet last night (my bank reports the deposit a day early) and decided to switch my autopay around a bit. I basically have the following accounts:
- Fidelity brokerage 1 - used for bills and whatnot
- Fidelity brokerage 2 - emergency fund, also where deposits go
- Fidelity Cash Management - personal spending (SO has their personal spending at another bank); used to be w/ credit union, but I wanted money market funds for better returns
However, I messed up, because the CMA needs to be the account hit w/ spending to do any form of overdraft (I've been handling this by keeping a month's expenses there at all times). So I started the process of switching our regular bill pays to the CMA, and apparently my new mortgage company is a giant pain because I can't access the autopay at all (no payment due, so I can't switch the next payment...). It's incredibly dumb, so I'm going to have a weird hybrid of personal money and family money for a few weeks while I sort out this nonsense. I could open a new brokerage account, but then I'd have to close it in a month and that sounds dumb.
Part of me just wants to pay off the mortgage and be done with it because I'm constantly running into stupid issues like this (i.e. if I want to change my insurance, I need to pay for it, then send the details to my mortgage company so they can pay for it going forward because they need proof of insurance). It really shouldn't be hard to switch which account pays a bill, yet here we are. But my rate is so low that it would be stupid to pay it off early, so I'm delaying until I'm FI.
Have any of you run into something stupid like that? What annoyances are you looking forward to completely eliminating once you're FI?
What percentage salary increase would you need to change jobs (assuming you like the one you're currently at)?
Context: I was reached out to by a recruiter for a role in my niche industry. It seems exciting, but accounting for the current benefits I have compared with the benefits at the new role, it would only be like a 10% raise at best. That doesn't seem like it would be worth it, but maybe I'm just looking for excuses to avoid change....
