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Post by Deleted on May 31, 2011 10:41:48 GMT -5
to accelerate debt paydown and saving for a house downpayment. Would you do it? Current plan will do the following: - credit card paid off by 2012 - car note paid by 2013 - purchase a house between 2013-2015 But I am thinking if we reduce our 401K contributions from 25% to 6% (just enough to get the company match), that would free up a little over $1,050/month (after taxes). This will alllows us to do the following: - pay credit card by the end of 2011 - pay car note by 2012 - save every penny towards the house downpayment (2013-2015) So this plan would allow us to a) get out of debt quicker b) save a bigger downpayment for the house purchase / have more money for emergencies in case something were to happen. I like both plans and both have pros/cons. Also, purchasing a house is not set in stone for 2013-2015, it is just a goal. Also if it does matter : - Credit card balance $6,880 at 0%. Currently paying $600/month - Car note balance is $13,996 at 6.2% and currently paying $500/month It does not seem like you would achieve much by cutting down from 25% to 6%, you would sill buy a house between 2013-2015. Have you added how much you would save by paying down the debt faster? It does not look like it would outweigh what you would lose by dropping your 401k from 25% to 6%.
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Firebird
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Post by Firebird on May 31, 2011 10:58:10 GMT -5
I'm starting to believe that the end of the world is real, because I've been agreeing with Zib far too much lately.
*snicker*
I agree with zib too, on her entire post. I doubt DW will continue to work, and decreasing your contributions is a horrid idea right now. It's very, very difficult to go back. Hell, it's difficult to get them to the proper level in the first place. Now that I'm at 10% (plus 7% in a ROTH, for a total of 17% of gross), I'm holding on for dear life.
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8 Bit WWBG
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Post by 8 Bit WWBG on May 31, 2011 11:23:29 GMT -5
What gets me most is the shock of hearing your spouse say something like that. I don't think Mrs. Cawiau realizes the full depth of what she is saying. I think she thinks it ends with the idea that he CHOSE to spend "his" money on them, while she does not. I don't think she sees the deeper "us" vs. "me" conflict.
Plus, its not just the spending. I can see how another unaddressed element is the clutter. There are books written about the hidden costs (health and financial) of clutter. I'd wager she isn't just going to throw out the stuff she bought earlier. This is the kind of behavior that leads to leasing storage units. These are the kind of people who park their cars in the street because their garages are full of junk.
One good thing I'll say about his wife: at least (from my memory of posts) she sticks to their deal. If I remember correctly, they each get an allotment that they can spend as they see fit. I'm pretty sure that although she spends it all, at least she isn't going above their agreement amount.
I've also said many times that I understand how it goes with life. One minute its "we need to pay off debt". The next minute its "here are the family weddings we are politically obligated to attend". Its complicated, especially with two large families and strong family ties. Its not easy to save money.
2012 really isn't that far away. I'm just not seeing the few months earlier you'd get it paid off being worth the risk of it getting diverted, as well as the lost compounding.
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zibazinski
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Post by zibazinski on May 31, 2011 13:34:04 GMT -5
I don't owe tons of money on student loans and credit cards so me getting stuff for the house for MY birthday present is totally different than someone in debt up to their eyeballs who also wants a house someday(we have ours and its paid for) pissing away a lot of money on junk for an apartment or even more clothing. OP, do you even realize how you make your wife sound? Is she REALLY like this or are you just playing us? I'd be so ashamed to admit I was married to someone so immature and self-centered. I was and it said so much more about me than it did him.
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8 Bit WWBG
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Post by 8 Bit WWBG on May 31, 2011 13:43:49 GMT -5
...:::"I don't owe tons of money on student loans and credit cards so me getting stuff for the house for MY birthday present is totally different than someone in debt up to their eyeballs who also wants a house someday(we have ours and its paid for) pissing away a lot of money on junk for an apartment or even more clothing.":::...
You spent your birthday money on stuff for "us", but I doubt your DF is telling you "well nobody told you to do that, and I'm sure not going to do the same". Thats what gets me most about this.
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yogiii
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Post by yogiii on May 31, 2011 13:56:04 GMT -5
I just want to 2nd Beth's comment...
Why as an adult is she getting $500 for a birthday present? Is this from her mom?
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Firebird
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Post by Firebird on May 31, 2011 15:09:05 GMT -5
I am ambivalent about your situation: sometimes I see you as really trying to save and change, but then other times I think you truly enjoy all the spending (you cave in a lot when your wife spends) and can relieve yourself of any complicity in the spending by blaming your wife. As I'm learning firsthand, it is *very* easy for the good-with-money partner to blame the not-good-with-money partner when things go wrong
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Firebird
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Post by Firebird on May 31, 2011 15:16:28 GMT -5
I wish you guys would set up a true emergency fund and a way of saving for short-medium term needs. These are two separate issues that you are confusing.
I know you want to have kids, but, maybe you really should consider waiting for longer. I don't see how you guys can afford them, and I don't see you guys willingly make choices that promote being debt free so you can.
Ouch, this hits home! ;D
I did the exact same thing as cawiau, and it bit me in the back also. In our case, it was because we weren't planning to move - but moving is going to save us $3,600 over the course of the year so the temporary dip we had to make into the EF (even though that isn't supposed to be the EF's purpose) was well worth it.
THAT part was, I think. Certain other choices we've made lately, not so much...
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DVM gone riding
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Post by DVM gone riding on May 31, 2011 15:18:43 GMT -5
wbgb I think caiwus wife has a legit complaint about how much they save for retirement and how much that limits her spending, she lets him do it because it is what makes him happy, in exchange she wants to be allowed to spend her birthday money how she wants. I actually think that is very reasonable and gives him the better end of the deal. I mean how many of us actually save 25% that is a huge number and at a very young age.
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achelois
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Post by achelois on May 31, 2011 15:33:36 GMT -5
It is a good amount if it actually goes into savings and STAYS there. Now is the time to save maximally when he has no house/no kids and time for compounding is on his side.
However, they also have the significant student loan debt and credit card debt, little EF and not much for regular maintenance (such as car expenses) or house downpayment.
They should have some entertainment spending, etc, but theirs seems extravagant. The wife should be able to spend SOME bday money, but $500 to $700 on fluff? Seems excessive, IMHO, when they have $6000 in cc debt.
It just seems incredibly self indulgent.
I try to remember how young they are and hope they can ride out this phase.
At least Carl knows WHAT to do, I think, even if getting there is rough. I second the idea of financial and/or marital counseling to help get them on the same page or at least in the same book.
Read debtproof living by Mary Hunt, Carl.
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8 Bit WWBG
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Post by 8 Bit WWBG on May 31, 2011 15:46:14 GMT -5
...:::"wbgb I think caiwus wife has a legit complaint about how much they save for retirement and how much that limits her spending, she lets him do it because it is what makes him happy, in exchange she wants to be allowed to spend her birthday money how she wants":::...
Its not the spending of the birthday money that has me so flustered -- if DF told me I couldn't spend my birthday money as I wanted, I'd be mad too. My specific complaint is the way she made him feel when he chose to use "his" money for "us" instead of just himself. As I said, if DF made me feel this way, I'd "learn my lesson" and revel in her realizing how she should have kept her mouth shut.
...:::"I mean how many of us actually save 25% that is a huge number and at a very young age.":::...
Very few -- probably about the same % of people that retire in their 50s with high net worths and the ability to pursue personal interests. Those two are correlated.
...:::"Now is the time to save maximally when he has no house/no kids and time for compounding is on his side.":::...
Oh heck yes. It is a common statement by those who have upgraded their lifestyle (bought a house, had kids) that they are amazed at how much money they frittered away when they had less responsibility. I know if you had told me that my housing would increase by $1k/month, I'd have said there was no way that would work. Yet I bought a house and oh... it worked. I found so many places to free up that money when I really had to.
...:::"but $500 to $700 on fluff?":::...
Well she is decorating, and depending on how you decorate, $500 can go really far, or hardly anywhere.
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Post by Deleted on May 31, 2011 15:54:19 GMT -5
I remember Carl posting a thread a month or so ago where it appeared that they were putting money into savings . . . and then taking it back out to spend that month. So it's not really clear how much they are saving and they were spending quite a bit. His wife has a ton of student debt. I too had a ton of student debt when I graduated . . . and became a housewife. I'm having some doubts about whether his DW will continue to work in the long term. Given that a huge chunk of their debt is her student loans and she received a lot of money I think it would have been reasonable to split the difference with her birthday money - half to debt or savings and half to some things for herself. It would also be reasonable for Carl to do this with his birthday money.
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endofera
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Post by endofera on May 31, 2011 15:56:03 GMT -5
This message has been deleted.
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Post by Deleted on May 31, 2011 16:04:15 GMT -5
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8 Bit WWBG
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Post by 8 Bit WWBG on May 31, 2011 16:12:50 GMT -5
I love how his networthIQ profile says the worst decision is "spending money on crap". If he really and truly reads the books he says he reads, this is not an education problem, this is a discipline problem. There is no lack whatsoever of understanding, just a lack of doing.
- They did move, and hopefully the $300/mo+ savings in rent has accelerated their payoff (I think he's already factored that in). - She is on board to a point. While she hasn't overcome her addiction to stuff, she isn't spending over her allowance.
I'm thinking more that he has the right attitude and is doing the best he can do within these parameters. I've also said before that in some of the spending, he is just as complicit. Eating out is a great example -- they both love it, and I'm sure that in the heat of the moment, they still sit down at that restaurant table. He's said several times they are trying to cut that back. Cawiau, have you succeeded? Are you eating out less?
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achelois
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Post by achelois on May 31, 2011 16:21:30 GMT -5
You are right, gowron, at least she is staying within some parameters. That is one good sign, anyway. I had not seen his networth iq post. Interesting.
I would agree with endofera, who for some reason deleted her post, that the student loan debt could be kept if it were at low rates, although if it were mine, I would pay it down rather than spend on crap; but I would encourage them to get rid of the cc debt (or at least put back the money to be able to do it if the terms for some reason change--you know cc companies!)
Maybe instead of eating out so much, Carl could become a gourmet cook, a la chuckie.
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Post by Deleted on May 31, 2011 16:26:50 GMT -5
I would agree with the not paying down the student loans aggressively if they didn't have so much - I think they owe almost 100k on her education.
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shanendoah
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Post by shanendoah on May 31, 2011 16:27:38 GMT -5
For intellectual honesty purposes, I am 10 years older than you, Carl, and as of May, put 5% (I would reach the federal limit at 20%) of my earnings in to my 403(b) (my company matches 1/2 up to 4%, so I have a total of 7% being put away). And, to compound our YM sins, DH hasn't worked for 2 years and we don't have a ROTH for him. Between the two of us, we currently have $55k in retirement savings. Lets start with the fact that we are NOT the example to follow for retirement savings. My first thought was that putting away a full quarter of your income for retirement sounds like a lot, but you are young and if you can live on 75% of your income- DO IT. The future value of that money is significant (as Phil pointed out). I am fine with birthday money being each person's to spend as they want, but that's a conversation that should probably happen before someone has $500 burning a hole in their pocket. DH and I each get an allowance, and any birthday money gets added to that person's allowance balance. (In our case its around $100.) Christmas money, however, we have to agree on how its spent, even though my father at least sends money to me and money to DH as well as a joint gift. For the most part, birthday money goes toward wants and Christmas money goes toward practical things (like groceries) or sometimes one nice dinner out for the two of us. But that's our deal, and we know it in advance. So when DH gets birthday money in June, I'll deposit it and credit it toward his allowance. Truth is, he'll likely not spend any of it until he buys me an anniversary gift in August (and this may be why I'm okay with the plan). I too like fiddling with the spreadsheets and playing "what if" and there's nothing wrong with that. But before you go making more changes, live with the ones you just made, at least for a couple months. Give it a chance to work before you decide its not good enough.
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Firebird
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Post by Firebird on May 31, 2011 16:58:10 GMT -5
You know, this didn't really register with me until people started discussing it but who gives their kid $500 and their kid-in-law NOTHING for a birthday present (unless they're pretty sure that money will be spent jointly)?
Maybe my parents are weird but I can't imagine them doing that - giving me money for my birthday and giving DF nothing for his. Of course, they don't give me birthday money anymore in the first place.
But I really feel like cawiau's mom should at least match her son-in-law's gift with her daughter's. It doesn't have to be $500 x 2, it could be $500 / 2 = $250 each.
Then again, my parents like DF and have no other children. I guess it's different for everyone.
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8 Bit WWBG
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Post by 8 Bit WWBG on May 31, 2011 17:04:11 GMT -5
...:::"Then again, my parents like DF and have no other children. I guess it's different for everyone.":::...
Indeed. I would never expect DF's relatives to send me birthday gifts, nor would (I hope) DF ever expect my parents to send her a gift.
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Firebird
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Post by Firebird on May 31, 2011 17:13:26 GMT -5
Indeed. I would never expect DF's relatives to send me birthday gifts, nor would (I hope) DF ever expect my parents to send her a gift.
Maybe it sounded weirder in my head. I'm thinking more along the lines of Christmas - frankly, I don't expect or receive birthday presents from anyone besides my parents and DF, possibly a friend or two. So birthday is kind of a strange example - but on another gift-giving occasion where everyone exchanges gifts (Christmas is the only thing that comes to mind), I'd kind of expect parents to be as generous to the in-laws as they are to their own kids.
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raeoflyte
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Post by raeoflyte on May 31, 2011 17:29:07 GMT -5
Huh-- my folks always give bday gifts to dh and his parents to me. Not $500 of course but some gift.
I also can't wrap my brain around berating a 25 y/o who saves 25% of her income and has stopped using cc. I realize they meed to pay it off but it's a relatively small amount in imo.
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zibazinski
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Post by zibazinski on May 31, 2011 18:01:19 GMT -5
I couldn't think of anything for my birthday and we have a new place that needs outdoor stuff. We were going to buy it anyway but this is a good excuse to get it (for my birthday) so DF doesn't have to stress over what to get me. Heck, I bought him a freakin' tree for his birthday!!! For Father's Day I'm getting him a towel warmer. That being said, I'd sit on crates if I owed money before I bought stuff for my house. Let alone someone else's place because I am RENTING.
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Gardening Grandma
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Post by Gardening Grandma on May 31, 2011 18:05:12 GMT -5
Huh-- my folks always give bday gifts to dh and his parents to me. Not $500 of course but some gift. I also can't wrap my brain around berating a 25 y/o who saves 25% of her income and has stopped using cc. I realize they meed to pay it off but it's a relatively small amount in imo. I think the outrage was more related to both the amount of money ($500) and the fact that she owes so much in SL, but seems unwilling to make sacrifices to get them paid off. She seems fine with HIM making sacrifices to pay off their debt. What bothers me is the apparent lact of common priorities and goals.
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zibazinski
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Post by zibazinski on May 31, 2011 20:21:12 GMT -5
It bothers most of us but she IS good in bed and She IS hot so he enjoys that AND throwing her under the bus and we get to throw him a pity party. I think its time to wise up and realize that we are being HAD by the poster. I do not believe the stories he tells about her anymore and just when the attention focuses away from him, he starts another "trash the wife" thread and we all do. Just what he likes.
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Post by Deleted on May 31, 2011 23:04:41 GMT -5
WOW, ok you guys made a 180 with this.
First of all in regards to our birthday gifts, we both get reasonably large amount (I am guessing large) for our birthdays from both set of parents and family members.
- I got $250 from my mom, $200 from her mom and about $200 or more from family members. Everyone always get me cash for my birthday because they got tired of asking me what I wanted and I needed nothing. So I haven't gotten an actual gift since I turned 16 or so for birthdays/christmas/etc always been cash.
- My wife got athe same from my mom and her mom, about $150 from her godmother and not sure exactly about the rest.
- I don't need/want anything right now, it's true. So me putting the money from my birthday towards our savings was not a sacrifice, I really had nothing to spend it on.
- My issue with the money spent, was not because the money was spent but on what it was spent. I feel we have everything we need and don't need anymore for the new apartment. Apparently she feels differently.
- And as I said, I am ok with her spending the money since it is not coming out of our accounts, it was money given to her as a Birthday gift thus was not accounted for. She is happy she gets to buy a few new things for the apartment, I am happy it is not costing us anything.
- Sorry for using EF instead of Savings. We don't have any short term/long term/EF account. We just have a Savings account that we use to deposit money into every paycheck and when we need some money we take it out of it. Since it is automatic the past couple of months we have taken money out of it more often since with my 2hr commute I have spent more money on gas than budgeted.
- We do not use the money in our 401K. We contribute 25% to it every paycheck and it remains there. No loans against it, no withdrawals.
- And as I said in the shopaholic thread: my wife does not spend us into the poor house. She uses her allowance to get what she wants/needs. I just thought it was weird (maybe a bit shopaholic tendencies) to always be buying something. But no she is not adding to our credit card debt, opening new ones and spending like no tomorrow. And the birthday money was hers, the issue was I feel we have enough things (word I used when I talked to her was "crap"), why do we need to be buying more since what we have should be enough.
- My wife knows I HATE and I mean HATE cluter, so she does donate alot of her old stuff to charity to keep the amount of "crap" (yes that is how I call all our things) we have to a minimum: some of our old furniture, fulton, some of her clothes (less closet space), purses, shoes, some of my old clothes, sneakers, kitchen utensils/gadgets/etc/
- And some stuff we are selling: patio set, dining room set (she used her birthday money to buy the new one for $216 after taxes since the one we had is too big for the new apartment), patio set (no patio), guest bedroom set (my old room and only 1 bedroom).
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Post by Deleted on May 31, 2011 23:36:18 GMT -5
Continued
- I don't blame my wife for our entertainment/travelling spending. We are both 26 and in many threads I have said we both like to travel, trying new food (restaurants) and yes on weekends after working about 50 hours we like to go out and meet friends for drinks, play pool or just drive to NJ or Long Island to visit our respectives families. We agree to cut back on it but we don't intend to cease it. --> I even replied to WWBG on another thread how yes if we stopped eating out, meeting with friends, visiting families and just going to work and coming home and doing nothing else, we could be out of debt in no time. But damn it we would be miserable, and that goes for both of us.
- We are both close to our families and yes it it costs money to attend/be part of weddings, family reunions, sending out gifts, be there but we don't want to give it up. My wife shows her affection by buying presents, things that people she loves will appreciate (and yes it add up) while I like spending time with the people I love which requires trip to Montreal, NJ, Philly, Haiti and does also costs a pretty penny. I guests we both spend money on the people we love but differently (she just spend $50 buying a gift for her little cousin birthday and had it shipped, I would have preferred to spend that $50 on gas and go to the birthday party).
- We intend/have a plan to pay down our debt : credit card first, car second, and student loans in 10 years. The thread was about if it would be wise to change course of action for now to pay the debt quicker and get it out of the way. Simple... everyone agreed no and I said good we would stick to our current plan. That was it, done, discussion over.
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zibazinski
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Post by zibazinski on Jun 1, 2011 5:52:39 GMT -5
Then since you are happy with how your spending is, you have nothing to complain about.
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swamp
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Post by swamp on Jun 1, 2011 8:00:15 GMT -5
What gets me most is the shock of hearing your spouse say something like that. I don't think Mrs. Cawiau realizes the full depth of what she is saying. I think she thinks it ends with the idea that he CHOSE to spend "his" money on them, while she does not. I don't think she sees the deeper "us" vs. "me" conflict. I agree with you 100%. However, her shortsighted/selfish/immature views aren't relegated solely the female gender. This isn't a gender issue, it's a maturity issue.
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Firebird
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Post by Firebird on Jun 1, 2011 9:45:19 GMT -5
--> I even replied to WWBG on another thread how yes if we stopped eating out, meeting with friends, visiting families and just going to work and coming home and doing nothing else, we could be out of debt in no time. But damn it we would be miserable, and that goes for both of us.
I hear you. It's the same with us.
swamp, gave you karma for that last post.
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