Lifetime Allocation Pie Chart: Learning, Earning, and Returning

You always see pie charts used to illustrate asset allocation for portfolios. Stocks, bonds, commodities, real estate, etc. How about a pie chart for deciding how to allocate your lifetime:

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This was one of the “life lessons” provided by entrepreneur Tristan Walker in his Bloomberg profile:

Spend the first third of your life learning, the second earning, and the third returning. I try to shorten earning so I can maximize returning.

Your time on earth is a finite resource. Let’s say you put your life expectancy at 84 years. That works out to:

  • From birth until 28 years old, you are Learning. You are building up your knowledge, skills, and experience. You are building human capital.
  • From 28 to 56 years old, you are Earning. You are converting your human capital to traditional capital – money!
  • From 56 onwards, you are Returning. Once you have enough, it is your turn to give back to your community.

Learning isn’t always done in school. For example, many people will tell you that in your early years, you should take on risks before you develop too many other responsibilities. Start a business, switch careers, or travel the world. Don’t worry about the money in your 20s; your basic food and shelter expenses can be barebones. Invest your time into yourself.

Along the same lines, you won’t stop learning completely at 28 years old, but your focus and priorities may change. As I get close to 40, I feel the growing pressure of providing security for my kids and the pressure of caring for aging parents. In practical terms, you’ll need to invest more of your time into making money. Well, I might change that to earning money and then saving a big chunk of it.

Then one day, hopefully sooner than later, you can move on to giving back in a way that aligns with your personal philosophies. Invest your time towards helping your family, friends, the local community, and the world.

This is a related concept to the Earn, Save, Grow, Preserve lifecyle.

Comcast Internet Essentials Review: Affordable Internet Access For Low-Income Households

comcastieComcast offers an affordable internet access program called Internet Essentials that provides high-speed internet service for $9.95 a month + taxes, a subsidized $150 computer with Microsoft Office, and free digital literacy training to eligible groups. Over time, they have expanded their eligibility rules and also added new features. Specifically, you now get:

  • XFINITY Cable Internet Service
  • 10 Mbps download & 2 Mbps upload speeds
  • No credit check
  • No activation or installation fee
  • No contract
  • Free modem + WiFi router rental

Here are the current ways to qualify for this program.

Low-income Families. You are eligible if you have at least one child who qualifies for the National School Lunch Program. If I read the income guidelines for the NSLP correctly, a family of 4 within the contiguous 48 states can’t make more than $31,590 a year to get free lunches during the 2016-2017 school year.

HUD Housing Assistance Households. You are eligible if you receive HUD housing assistance such as Public Housing, Housing Choice Vouchers (Section 8 Vouchers) or Multifamily Vouchers (Project-Based Section 8).

Seniors Pilot Program. You must be 62 years old and live in one of the current eligible areas. You must also be enrolled in an eligible state or federal public assistance program. As of mid-2016, the list includes Boston, Palm Beach County, Philadelphia, San Francisco, and Seattle.

Community College Student Pilot Program. You must be enrolled in an eligible community college, and also be a Pell Grant recipient. As of mid-2016, the list includes select community colleges in Colorado and Illinois.

In addition, for all groups, you must not have any outstanding debt to Comcast that is less than a year old. Families with outstanding debt more than one year old may still be eligible. You must also live in an area where Comcast Internet Service is available but have not subscribed to it within the last 90 days.

Problems and controversy. If you are already a low-income family that stretches to pay for Comcast internet access, you would need to cancel your existing service and then wait for a full 90 days before signing up for Internet Essentials. If the idea is to give your children the educational benefit of internet access, then it may be difficult to go without internet for 90 days.

This program is not supported with government taxes. Instead, it is a way for Comcast to make happy with various government regulators when they want to merge with another huge company. Indeed, Comcast as a monopoly or part of a duopoly in most areas may be the reason why average people are being charged $40 or $60 a month for basic internet access in the first place.

In any case, it exists, millions more households are eligible that aren’t signed up, and I think it is worth spreading the word. Apply online at internetessentials.com or over the phone (1-855-8-INTERNET or 1-855-846-8376).

The Continued Decline of Cooking at Home

nocook0Quartz published an article with the provocative title No one cooks anymore, noting that for the first time Americans are spending more money eating out (including bars and restaurants) than at grocery stores. The trend has been very steady for the last 20+ years, per US Census Bureau data:

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Although not quite greater than 50%, a similar story is told by USDA data about “food away from home as share of US household food expenditures”:

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Obviously, some people still cook. A more accurate statement would be that only half of us cook on any given day, and when we do we spend about an hour doing it. That is my interpretation of the following data from the US Bureau of Labor Statistics and their American Time Use Survey (ATUS).

The average American spends 27 minutes a day on food preparation. Women on average spend nearly twice as much time as men, but for everyone it works out to about half an hour a day.

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But on any given day, only about 56% of people do any food preparation at all. (Again, women more likely than men; I took an average.) Therefore, when a person does cook at home, they are probably doing it for about an hour.

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The ATUS also tells us that the average American spends 3 hours a day watching TV. Therefore, it’s not that the average American doesn’t have “time” to cook at home, they simply choose not to. Perhaps they are exhausted from work and just want to rest on the couch. It is certainly understandable. Some people argue that the food media makes food appear too perfect and daunting to make. Others have observed that Food Network is become more and more game shows and less and less instructional. Either way, lots of people are watching strangers cook while eating take-out themselves!

If you don’t want to cook, the food industry will certainly help you with that. Heck, you can simply drink Soylent if you don’t want even chew. I must admit there are weeks where my family’s routine is consistent with the cook one day, buy pre-made meal the next day ratio. If you do want to cook more at home, then here are the things that have helped me.

  • Find motivation. Determine the core reason why you want to cook more. Is it health? Is it to save money? Is it for personal fulfillment? For me, I want cooking regularly at home with raw ingredients to be part of my children’s memories and thus future expectations. I don’t want “mom’s food” or “grandpa’s food” to be KFC buckets or Stouffer’s frozen lasagna.
  • Plan ahead. Learn from my flowchart and plan ahead on Sundays. Plan ahead. Plan ahead. Plan ahead.
  • Just jump in. There are a billion recipes out there, many specifically-tailored for quick weeknight meals. Just pick one that looks easy and try it out. After a while, you’ll get better at picking better recipes and/or altering existing recipes to fit your tastes.
  • Don’t aim for perfect nutrition. Go easy on yourself, at least in the beginning. I am a fan of the eat anything, just cook it yourself philosophy. If you want to eat a steak, make a steak. Bake a potato (start in microwave, finish in oven) and use this frozen steak method. The next time, expand and bake some kale chips.
  • Learn with short online videos. Sometimes I think I could build a car from scratch if I had the right YouTube videos. I doubt I would have ever tried making my own porchetta if there wasn’t an instructional video attached with tasty pictures. (It is delicious and very easy with a food processor. Eat as a sandwich with your version of salsa verde.)

Google Fi: Simple, Pay As You Go Cell Plan With High-Speed International Data Included

filogoWe recently returned from a family trip to Europe, and I found myself missing my data plan more than ever before. I kept thinking about the slow 2G data that T-Mobile includes in their postpaid plans and how it might power data-light apps like maps, weather, Uber/taxi, and public transit “when is the next one coming?” apps. (Oh, how it would have helped in the pouring rain in the middle of the city with a 1 and 3-year old…) Why couldn’t this be offered to the rest of us for a half-decent price? I didn’t even consider surfing the web fully, watching a video, or streaming GPS directions due to the fear of a huge bill.

If you are a regular international traveler, you may have heard of the Google Project Fi cell phone plan. Here are the basics:

  • $20 a month flat for unlimited domestic talk and text, unlimited international texts, and tethering. Non-WiFi international calls can get a bit expensive, $0.20 per minute inside the UK for example.
  • $10 a month per gigabyte of data used, either domestic or international. You pay only for what you use, down to the penny! So if you use exactly 1.4 GB of data, you end up paying $14.
  • No annual contract.
  • Taxes and fees not included, as with other postpaid plans.
  • You must use an approved Google phone. The new ones on sale are the Nexus 6P and Nexus 5X (starts at $199 with activation). The older Nexus 6 is also an option.
  • Once you have activated service, you can add additional tablets like select iPads using their data-only SIM card, all while sharing the same data plan.

In the United States, your phone will switch between Sprint, T-Mobile, and US Cellular networks based on which has the best signal. You have full access to the fastest 4G LTE networks where available.

Previously, international data was throttled to 256 kbps, which is roughly 3G speed. On July 12th, 2016, Google announced that due to an agreement with Three, those speed caps will increased “10-20X faster than before”. That means you’d be getting close to full 4G LTE speeds for international data. They also announced a limited-time offer of $150 off the Nexus 6P, bringing the base model down to $349 with activation.

There are some cons. If you are a big domestic data user and/or you have a family plan, Google Fi can end up being more expensive than existing plans from the major providers. There also doesn’t appear to be any plans to support other phones like Apple iPhone or Samsung Galaxy.

Bottom line: Although it won’t work out as the cheapest for everyone, the simple elegance of this plan is the most intriguing feature. For you “digital nomads” out there, recent changes now make Google Fi one of the best plans for frequent international travelers that want high-speed smartphone data wherever they go.

UberPool vs. Public Transportation: New York City Promotion

It’s no secret that Uber wants to take over the world… or at least replace individual car ownership. Uber just announced a New York City UberPool promotion that offers unlimited rides this July and August:

  • Two-Week Unlimited Commute Card (July or August) for $49
  • Four-Week Unlimited Commute Card (July or August) for $79
  • Eight-Week Unlimited Commute Card (July and August) for $159

Trips must begin and end in Manhattan below 125th Street. Valid Monday–Friday from 7–10 AM and 5–8 PM. Valid for both new and existing Uber riders. A quick view of how UberPool works:

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Quartz ran some rough numbers that found that this promotion can make with UberPool cheaper than taking the New York City Subway:

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For now, this is a limited promotion. But I wonder about the future. Even as someone who lives in the suburbs, I have enjoyed the convenience and savings of Uber.

Healthy Food Rankings Map: The Most Under-Appreciated vs. Over-Marketed Foods

The NY Times surveyed Americans and a panel of nutrition experts about which foods they thought were good or bad for you. Everybody agreed that apples and carrots are healthy food. Everybody agreed that soda pop and cookies are unhealthy foods. Where the experts and the generic public disagreed is where things got interesting. Check out the graphic below, in which I have altered the original a bit (click to enlarge):

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Although the NYT did not say this, I would label the foods that were considered healthier by the general public than nutritional experts as heavily-marketed and usually branded. These are foods that businesses would like you to think are much healthier than they really are. This would include granola bars, coconut oil, frozen yogurt, SlimFast shakes, and highly-processed orange juice. You often associate them with a specific brand like Nature Valley granola bars or Tropicana orange juice.

Along the same lines, I the foods that were considered healthier by nutritional experts than the general public are under-marketed and under-appreciated. These include quinoa, tofu, sushi, hummus, and shrimp. Not surprisingly, these items are less processed and I can’t even come up with a brand for quinoa or tofu. Sabra for hummus, I suppose.

Finally, hovering in the 50% range for both groups are things like steak, pork chops, whole milk, and cheddar cheese. These seem to be the “not junk food, but only eat in moderation” category.

Where Should You Focus Your Energy? Earn , Save, Grow, or Preserve

While I often talk about your savings rate as an important metric for reaching financial freedom, I also follow that up by talking about managing both parts of that formula: earning more and/or spending less. Focusing your energy on a specific task is often better that trying to do everything perfectly and getting frustrated when you can’t juggle all the balls at once.

Financial planning expert Michael Kitces has come up with a helpful framework called The Four Phases Of Saving And Investing For Retirement that is related and also takes into consideration your portfolio size. This graphic he created explains it well:

fourphases

Here are my own notes and paraphrasing (please read original post for his own words):

  • Earn. First, you need income. Focus on your human capital to help you earn more. Invest energy into your education, career skills, and network (surround yourself with good people). If it fits your personality, take a risk and start a business.
  • Save. Once you have significant income, be sure to save a big portion of it. Create systems and habits to help keep your spending modest. A 30% or 50% savings rate for above-average earners is not out of the question.
  • Grow. Once you have significant savings, spend some time developing a set of solid investment beliefs and a written plan. Devote time specifically to learning about investing and/or find and hire a trusted advisor. Your money should always be making more money.
  • Preserve. You should only need to get rich once. Do you have proper insurance in place? Create a long-term plan to preserve and ultimately live off the income from your investment portfolio and other assets.

You can pay attention to the other areas, but I like this lifecycle method of prioritizing your finite time and energy.

I Tried Harry’s Free Razor Trial and This Is What Happened…

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…that’s the ad text that they used to target me, apparently someone who may be interested in bright-orange, modern-looking razor blades. I couldn’t find the exact ad again, but a similar one is to the right. (Alternate title: Harry’s Free Trial Review: Bendy Razor Blades, Easy Cancel)

Well, they were right. I decided to try the Harry’s “Free” Trial which includes a razor and some gel for $3 including shipping. If you don’t like it, just remove the subscription plan in your online account and you get to keep everything else.

Okay, so what happened? The primary reason that I will not be buying any more Harry’s Razors doesn’t involve cost at all. I simply don’t like their design. The blades are proprietary and have a unique “bendy” hinge that I describe as like having a tongue lick you. A tongue that makes it impossible to get the firm shave that I prefer.

I created an animated gif to help illustrate:


via GIPHY

After doing this trial, I found that the Wirecutter review site had a similar opinion:

Rather than clipping to a pivoting axis, the way most modern razors do, Harry’s cartridge attaches with a flexy rubber pseudo-hinge that bends when you press it into your skin. Harry’s claims that this design yields an effect that, like “a paintbrush on a wet canvas … flexes to the contours of your face for precise control.” In fact, the opposite is true: The cartridge yields too much, resulting in a sloppy shave.

I don’t consider myself a picky razor user, for a while I’ve been using a basic Gillette Mach 3 bought from Costco for $1 or under each. (I was surprised to see The Wirecutter also chose a Mach3 blade cousin as its winner.) As I can last more than a month with each razor (dry after each use), I am already spending less than a dollar month on razors. I have not tried the Dollar Shave Club. For me, buying a bulk pack of razors once every two years requires less mental bandwidth than having to manage an online subscription.

I’ll keep the rest of this review short and simple:

  • Ordering was easy, site design is nice, and the trial shipped promptly.
  • Canceling the trial was also easy with no hard sell.
  • I did not like the razor design, and for that reason will not be ordering any more Harry’s razors.

Shaving preferences are very subjective. I would still recommend the Harry’s trial itself.

Follow-Up Review: Costco Freezer Meal Plan From 5 Dollar Dinners

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A while ago, I wrote about a meal planner service called $5 Dinners that provided instructions on how to make 20 slow cooker meals for $150 at Costco. You go to Costco, buy exactly what is on the provided shopping list (6 pack of chicken breasts, 15 lb bag of potatoes, massive tub of BBQ sauce, etc), and then chop and separate all the ingredients into 20 separate freezer bags. When you want an easy dinner, pop a bag into your slow cooker in the morning and you’ll have dinner ready by the time you’re done with work.

I paid $5 for complete instructions including grocery shopping list, assembly videos, and label template files. The exact meal plan that I bought is now called Slow Cooker Freezer Packs, 1st Edition Complete. It took me a few months to get around to actually making all the meals, but I did make them all in November 2014. Here are some pictures of my final product:

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Why did it take over a year to get this review out? Well, part of the reason is that it took us a year to actually finish all the meals! Unfortunately, the reason why it took us a year to finish the meals is… we didn’t enjoy the meals very much. I didn’t want to write a negative review for an entrepreneurial idea that I thought was really cool that was based on my own tastes, but they are doing quite well so allow me to use this as another opportunity to provide you helpful information based on my own failures. :)

Takeaways

  • Cook and eat a sample recipe first before making 5 of the same recipe. I was distracted by my own excitement of being able to knock out 20 meals in one day, I just jumped straight in. I found the recipes to be a bit bland in flavor and boring in texture when followed exactly. You may feel differently, and their newer recipes could be much better, but again you won’t know until you try it.
  • Set aside an entire afternoon. Making all 20 freezer packs in one day took about 4-5 hours, and it was pretty exhausting. Set aside plenty of time, as it takes a lot of chopping and portioning.
  • Make sure you have adequate freezer space. Even if you follow their tips to lay them flat, these take up a lot of room! We have a standalone freezer and it was still a tight fit. You may also want to place them in a tub in case of leaks.
  • Use the plans as a starting point for your own customizations. Adding your own herbs and spices, as well as some lemon juice or hot sauce at the end can really perk things up. Personally, I prefer to season and brown my meat before putting it into the slow cooker. I love me some Maillard reaction!
  • Try using your own recipes first. A more gradual way to start your own “backup dinners” is to simply double-up on one of your current recipes, and freeze the extra portions.
  • For the price of $5, I still think it is worth a shot. There may be different and/or improved recipes now. I still think it is a great entrepreneurial idea.

Optimize Your Bank Account Setup: Megabanks, Credit Unions, Online Banks, and Prepaid Cards

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Consumer Reports is getting more into financial products, with their January 2016 issue cover article on Choosing The Best Bank For You, most of which was also made available to the public without a subscription. If you haven’t optimized your bank account setup recently and you missed it the first time around, the article is worth a read. Perhaps it was just anecdotal, but I read somewhere that most people are still with their first bank account out of high school.

Here are their high-level conclusions:

  • Mega Banks: Best for Convenience, Technology, Security
  • Credit Unions: Best for In-Person Customer Service, Lower Costs
  • Primarily Online Banks: Best for Online Customer Service, Higher Savings Rates, Lower Costs
  • Smaller Regional and Community Banks: Best for Personal Service
  • Prepaid Cards: Easier to get than a bank checking account but some are loaded with gotchas.

It appears that Consumer Reports is still keeping their specific rankings and numbers behind a subscription paywall. But they do agree with me about the idea of spreading your wealth and choosing your financial accounts a la carte to get the best deals.

Now, I am not the ideal person to emulate as I have too much complexity in my financial accounts. The only good news is that I have tried so many of them. Here are the accounts that I currently have open, and what I think about them. For the most part, my experiences align with the Consumer Reports findings.

Megabank: Bank of America

  • Pros: ATMs and branches everywhere nearby. Good online and app user interface (Touch ID). Good perks when combined with brokerage and credit cards.
  • Cons: Basically-zero interest rates.

Credit Union: Local, Community CU

  • Pros: Free notary, low interest rate HELOC.
  • Cons: Small ATM and branch footprint, poor online and app user interface, current low interest rates (used to have a rewards checking account).

Primarily Online Bank: Ally Bank (see Ally review)

  • Pros: High interest rates, fast and flexible interbank transfers, good customer service, good online and app user interface (Touch ID).
  • Cons: No physical branches.

Prepaid Card: NetSpend (see NetSpend review)

  • Pros: 5% APY on $5,000 balance if card kept active. (Update: 5% APY on $1,000 starting 7/1/16.)
  • Cons: Certain fees and fine print to work around.

In terms of the convenience factor, my new favorite feature is Touch ID with Apple iPhones. (Android has their own version, I’m just not familiar with it.) BofA, Ally Bank, Mint, Fidelity, and Robinhood supporting this app feature, I can now get full access to transaction history and even initiate online transfers in under 10 seconds. I hope Vanguard adds this soon (cough, cough!).

Digit Review: “You Won’t Even Notice” Automated Savings Account

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Want to save more, but don’t want to actually think about it? Digit is a fintech start-up that combines a free FDIC-insured savings account that want you to give it permission to tuck some of your own money away for you. There’s mindless eating, mindless spending, and now mindless saving.

How does it work? Instead of rounding up your card purchases or getting you to commit a regular savings schedule, Digit is like a helicopter parent sneaking into your wallet/purse and taking out money when it thinks you won’t notice. Okay, so it’s more about an algorithm that tracks your income and spending patterns… and then takes out money when it thinks you won’t notice. It keeps on depositing that money into a savings account until hopefully one day you have something substantial Here’s a nicely-illustrated video about it:

SMS Text-based interface. After you link up an existing checking account, ongoing interactions with Digit can be done almost completely by text message. If you prefer apps, Digit now has an iOS app that offers a little bit of extra polish to your normal text message program. I thought it might be redundant, but I actually prefer using the app now. A few screenshots:

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Free. Digit does not charge any fees directly. They make money by keeping any interest that might be earned on your savings balance. Given that the top savings accounts pay roughly 1% APY, that means for every $100 in the account you’re losing out on $1 a year. (Technically less, given the new Savings Bonus outlined below.) They also promise not to sell your transaction data.

New features: Minimum balance protection, Savings Bonus. I actually started using Digit a few months ago, but turned it off when I found out they didn’t (at the time) have a minimum balance protection feature. For example, you might have a bank account that requires a $1,000 minimum daily balance to avoid a $10 monthly fee. Digit used to have no way of knowing that, although they did promise to refund any overdraft fees. Now, you can set a minimum value that Digit will not allow your account to go below.

Digit also offers a “Savings Bonus” now:

Every 3 months you will receive a Savings Bonus from Digit. The Savings Bonus is based on your average balance over the previous 3 month savings period. For every $100 you keep in Digit for 3 months you will earn a 5 cent Savings Bonus.

The math roughly works out to 0.20% APY interest rate. Not exactly awe-inspiring, but I suppose it is something. I’d still rather just withdraw my money once the balance got big enough.

My personal experience. Every few days, random amount like $5.22 or $11.35 would be debited from my checking account. Honestly, for some who likes to be in control, having all those extra entries on my bank statements got to be a bit annoying. After a couple months though, I had over $300 saved up. Was this amount more than I would have saved anyway? Would I be better off with a formal budget? It’s hard to say. I can imagine some people really liking the feeling of “found money”, though.

Recap. Digit offers mindless saving, which is definitely a unique proposition. As it is free, I would place it under the “Try It Out” category, as long as you are okay with giving a start-up app access to your main checking account. You might like giving someone else the steering wheel. You might not. I’m still on the fence myself. If previously-reviewed Qapital was “set-your-own-rules”, Digit is more “leave-it-up-to-the-robots”. You could even use both apps at the same time.

Infographic: New York City Median Rent vs. Subway Stop

rh_nycsignWe all know that the longer the commute from where everyone works, the lower the rent. In many cities during the housing boom, the saying went “just keep driving until you can afford something”. But what if the relationship between commute time and rental price wasn’t steady? What if a few minutes of extra commute time would save you several hundred dollars a month?

There are indeed some great relative values in New York City, according to the results of a study by apartment listing site Renthop, via This Is New York. Here are the median rents for one-bedroom apartments nearest every subway stop in New York City:

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Highlights from their analysis:

The extra few blocks from 66th St to 72nd St could save you $845 per month. Granted you might really like the Lincoln Center area, but that’s enough extra dough for a trip or two to the NY Philharmonic, the Met Opera, or even dinner at Jean-Georges.

A good rule of thumb is that each stop is about two minutes apart (except express stops and when crossing a bridge), assuming there’s no “debris on the track” or “train traffic ahead”. Consider this when calculating what your time and commute is worth to you. An extra stop on the J/M/Z train past Marcy Ave will save you about $175, and each subsequent stop saves another $100 or more. The same holds true heading into Queens.

Someone should make a similar graphic for all the of the major cities with high usage of public transportation: Washington DC, Boston, San Francisco Bay Area, Chicago, and Philadelphia. From Wikipedia:

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