How To Be Smarter With The Money You Are Making

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You've built this business and

figured out how to make money.

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Now what?

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Um,

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Hey, rich friends is Dr.

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T Mac here and welcome to another

episode of the rich friend show where

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we help women entrepreneurs and women

professionals achieve financial freedom

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and build real generational wealth by

providing you with the tools mindset

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and knowledge to make manage and

multiply your money with confidence.

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In today's episode, I'm going to be

talking about how to be smarter with

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your money that you're already making.

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So this episode is

particularly for the woman.

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Professional.

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Let's say that , you are in a job,

corporate America, or if you are in

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health care and you're making money,

you're making a decent amount of

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money, but you don't know what to do

with your money and you want to work.

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You want to put your money to

work for you so that your money is

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working smart for you and you're

not working hard for this money.

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So the first topic that I want to talk

about Is working smarter and not harder.

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And that pertains to wealth building.

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And in some of my previous episodes,

I talked about , wealth building,

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, strategies as it pertains to real estate.

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We all know that financial education

is not just about saving money.

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Rich friends is also about.

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your money, understanding investment

principles, real estate investment

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principles in particular, understanding

the power that it has when it

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comes to effective wealth building.

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So I want to go in.

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To maybe about five of these principles

now, and I'm going to leave a link

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below where you can download the rest

of these principles, but I really wanted

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to dive into at least the first five.

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The first one being

education and research.

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I am big on education.

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And understanding exactly what you're

doing when it comes to real estate, like

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the basics of real estate investing,

including market trends, what's going on

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in the market where you want to invest?

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Are they building?

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Is it a, market where education is?

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It's really big in that market.

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If so, then student housing would be for

you, are you interested in single family

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homes or condos or multifamily homes

where you have a duplex or a quad or a

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triplex, or are you looking at commercial

properties where there's , four or more?

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Housing or areas where you can invest

that is like super important to understand

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the market trends in your property types

. What can you do in that particular area?

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What type of properties would be good

to invest in your local markets like

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researching that the property values?

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What's the amount?

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What are these properties valued at?

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Rental rates.

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Super important.

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If you are in an area where rent

rental rates are maybe, let's say

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1, 000 a month for a three bedroom,

two bath or two bedroom, one bath,

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depending on your market, how can

you maximize that your rental rates?

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Understand the baseline and for those of

you who've been following me, you know

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that I absolutely love the unlicensed

group home model where I rent out

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beds, for a certain amount per month

where I can six or 10 X my rental,

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income in one particular property.

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That is like one of the major

moves in real estate for me.

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And that's how I was able to just

maximize each property that I own.

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So think about if you're at the rental

rate in your area, let's say it's a

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thousand dollars per month for a single

family home, maybe a three bedroom,

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one bath, three bedroom, two bath.

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If you can put two beds in

each bedroom, that is six beds.

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If you charge.

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Let's say a minimum of

600 a month for six beds.

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That's 3, 600 a month for one property

versus a thousand dollars a month.

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If one person doesn't

pay, then that's okay.

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Because you still, you're still able to.

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Pay your mortgage on your property and

all of the overhead and expenses versus

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renting one, renting out to one tenant.

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And if they don't pay, then you're

on the hook to pay everything.

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So that is something to think about.

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Also, you want to think about

location, location, location.

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The value of real estate

is heavily influenced.

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By its location.

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So you want to look for areas with

strong potential, like good schools.

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Especially if you want

to do, not group homes.

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Section eight.

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If you want to do section eight housing,

then you want to look for the schools.

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What are the school's ratings?

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, that is really key when you're doing

section eight housing because guess what?

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People on section eight have Children.

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And they want to put those

children in a good school

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system, a good school district.

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So you want to do your research

amenities, low crime rates.

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You don't want to put your kids or

people do not want to put their kids

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in areas where the crime rate is high.

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You want to do your due

diligence and check out that.

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Consider the proximity to employment hubs,

transportation, future development plans.

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All of those are super important when it

comes to, picking out your, , property,

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your real estate property for rental.

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Okay.

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The next principle is financial

analysis and budgeting.

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A lot of people don't, they try to

skip over this, but this is a huge

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part of investing in real estate,

knowing your numbers, like analyzing

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the properties in terms of cash flow.

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How much are you going to

cashflow from this property?

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When I bought my very first

property, I only cashflow 200.

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I did it for like maybe

four to six months.

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And I was like, this ain't it.

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. So I wanted to increase the

cashflow in my property.

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That's why I moved to the unlicensed

group home model because I could cashflow.

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Several thousands of dollars for

one from one property versus 200.

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You also want to look at your ROI,

which is your return on your investment,

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your capital appreciation, potential,

also the total cost of ownership.

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When I talk about ROI,

use a, an ROI calculator.

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I like to plug my numbers in.

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Because I want to see how much return am

I going to get on my initial investment?

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I want to know how much is this property

going to give me when it appreciates.

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I want to know my total cost

for ownership, like how much.

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Does it cost to have this property?

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My taxes, my insurance, things like that.

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I want to know that because your numbers

will determine if it's a good deal or not

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a good deal when it comes to real estate.

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And you also want to ensure that

you have a realistic budget,

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including your cost of acquisition.

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How much does it cost

to purchase a property?

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Property improvements.

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How much will it cost if you

need to rehab this property?

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You also want to include Your maintenance,

ongoing maintenance for your property.

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You want to allot the amount of

money that it takes to maintain the

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property and unexpected expenses.

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I know one of my rental properties

within the first nine months, the,

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I had to buy a new refrigerator,

the old refrigerator went out.

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Then I had to buy a new washer.

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and dryer because something

happened to the washing machine

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and then the dryer went out.

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So I had to make sure that was allotted

in my budget to be able to afford that.

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You also want to know, and this is

another principle, risk management.

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That means understanding the

risks that are involved, such

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as the market fluctuating.

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The market can go up.

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The market can go down, but you

need to understand that what you

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have invested in your property.

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Is it enough to sustain you

and to make more money for you?

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You need to, , give an

account for property damage.

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If there is God forbid, a hurricane,

a tornado or something like that, make

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sure that you have enough insurance

that covers that so that you're

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not coming out of pocket for that.

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You also want to allow for vacancy.

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If, in fact, you have a property, , if

you have a tenant that you have to evict

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from the property, how long will it

take you to get another tenant in there?

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Will it take you a month?

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Will it take you two months?

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Will it take three months?

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Because you're still, if you have

a mortgage on that property, you

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still have to pay that mortgage.

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Okay?

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So you have to give an

account for the vacancy.

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And you also need to have

strategies in place to mitigate

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these risks like insurance.

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And an emergency fund and if you're

using the strategy, especially the, , a

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licensed group home strategy, this is

super important because you will have

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a lot more money to play with and a

lot more money to mitigate these risks.

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, the last thing that I want

to talk about, , the last.

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, investment principle for real

estate is diversification.

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You want to be able to reduce your risk by

diversifying your real estate properties.

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This means investing in different

types of properties, whether it's

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residential, you want to mix it

with commercial or industrial or

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any different geographic locations.

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That's when I use different

places where I invest my.

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My money and spread out my real estate

portfolio so that all of my eggs are not

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in one basket in one particular area.

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This is super important when it

comes to real estate investing.

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There are probably about.

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, seven, seven more principles that I'm

not going to go into today, but I will

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leave a link below so that you can

download a free, , PDF that has all of

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these principles and also has a little

blurb about each one and what you need

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to do to hedge against anything that

may impede you making money in real

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estate with your real estate investment.

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, also have a link in that PDF where

you can, , check out the rich friend

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circle for free for seven days.

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And if you have not purchased your

copy of we should all be rich friends

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book, then you can grab it today.

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All of those links are

included in inside of that PDF.

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Go ahead, click the link below, grab

your free PDF with your checklist to

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make sure that you have all of the

principles to real estate investing.

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This is Dr.

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T Mac.

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Don't forget you can have it

all see you on the next episode.

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Bye for now

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Um,