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Martin

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Hey all. So aside from game development and publishing I also read in to how to get rich in different areas. One of the key ingredients I hear over and over again is become and investor. Robert Kiosaki in his 'Rich Dad Poor Dad' book series highlights this and says that in order to become rich you need to be a business owner, and an investor. I'm now working on the business owner part and slowly learning, but I also need to learn how to be an investor.

If you've ever looked in to stock market investing there's a ton of material out there and it can be really confusing what to do first. Some say invest in a mutual fund, some say don't diversify, some say invest a certain percent in bonds. There's also active trading techniques such as 'puts' 'stop losses' 'trailing stop losses'. As well you need to consider what type of investor you want to be, for example do you want to day-trade and look at the screen all day and buy and sell each hour. Or do you want to have a more long term passive strategy where you just put money in to the stock market, or other investment vehicle and let it grow over 5, 10 , 20 years. It's all very confusing and the world of investing can be scary.

I read about people getting rich all the time in the stock market and I often wonder if I doing the right thing. Am I trying to catch minnows (small business) or trying to catch whales (big business deals like in the stock market or real estate?

Either way I needed to test it out and so I recently started to put some money each month in to an index tracker fund by Vanguard. I also bought some shares in a UK company and another mutual fund which is actively managed. I started this thread to open up the subject and share some idea, tips, and info together. I'll do a video soon talking more about it and share my recent beginner investor results so far.

The main question I'd like to answer though is, how do people get rich, and how can we do the same?

Here's a couple of videos I'm watching to learn more and I'll keep adding the thread.

Happy developing, and happy growing all [smile]
Martin


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Martin

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Reply with quote  #2 
This is an excellent video which describes the basic of an economy and how the debt cycles work.
I like the point about focusing on productivity as well. I also read somewhere that one of the keys to wealth / riches is to focus on buying assets, not liabilities. So for example, instead of buying a new HDTV, you purchase stocks or bonds instead. I'm working on growing my assets now by purchasing stocks through index funds but eventually I would like to buy properties to flip and rent. But this requires a lot more cash down, hopefully next year this will happen.

Enjoy the video [smile]
Martin


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Martin

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Reply with quote  #3 
Hey again all. I'm just adding a couple of links that I want to watch / read later. It's better than adding them as a bookmark in chrome because I'll just forget about them lol.

Here's an article about Index Tracker funds. I purchased 200 GBP of one of the LifeStrategy funds from Vanguard. We'll see how it goes and I'll post some screenshots here to show the stats - sounds like im posting download stats lol:

http://www.thisismoney.co.uk/money/investing/article-1583915/A-guide-cheapest-index-tracker-funds.html

Here's a video I'll watch later about billionaire Mark Cuban:

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Martin

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Reply with quote  #4 
This is a great video which talks about the basics of company investment, profit, shareholders, equity and debt, taking a company public, and company valuation. We need to eventually get investment and go public as a business and so it's something I need to learn more about. So far the world of big business, venture capital, and going public is pretty alien to me and I've resisted getting investment for this past 3 years since Cobalt Play began. But selling a company publicly on the stock market could be the way to go if I and the shareholders are to get rich. What do you guys think? Do you have plans to get investment and eventually go publish too?


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Martin

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Reply with quote  #5 
Hey again all. I just came across a post from Carter, who runs an app business, about investment and how to make money. It's a good coincidence since I just started this thread here a few days earlier. There's some great tips in there and I especially like the one about reaching a 'critical amount' before investing in order to keep the costs low. This is something I didn't consider before. It's also a big coincidence because I invested a few hundred GBP in a Vanguard low cost index fund a few days back, and low cost funds were also suggested by Tony Robbins as mentioned in Carter's post. Here's the link:

http://www.bluecloudsolutions.com/blog/money-master-the-game-what-he-left-out/



By the way, I watched the video about Mark Cubin in the post above, awesome video that's really inspiring. I think one of the keys I'm missing at the moment is using OPM (other peoples money). I don't mean using old Mrs Jones' money to gamble on new business, I mean getting investment money from the bank or other investors. It looks like Mark Cubin starts businesses, gets other people to run them, and then starts another business. This is something I need to do as well but at the moment I'm 100% busy on Cobalt Play and Panda Tap Games. So I need to figure out how to do this.

Martin

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Reply with quote  #6 
Im also researching in to how to buy real estate and rent it out. I'll add more on this later but I wanted to share this good beginner video. I'm half way though it.


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Martin

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Reply with quote  #7 
This is a great video explaining how over borrowing can lead to severe problems. It's not related directly to the subject of 'how to get rich' but I think controlling borrowing a bad debt is extremely important in growing wealth. But also I've made it a goal to really understand how money works on the larger global scale and therefore understand when opportunities arise. 
The question from this video though is, who are these countries all in debt to? A central European bank?



And a good video which explains the Japanese debt crisis



This video talked a little about who actually owns the debt of the US, ie, who does the US owe money to. It's partly China, but also the Federal Reserve, the IRS, and US citizens who were probably investors in government bonds.


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Grumpy

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Reply with quote  #8 
Yeah I think a lot of long term success and wealth comes from saving and investment. I've only been investing for about a year, but I'm really hooked by it. I've found so far that low cost funds have worked the best for me. I really like the Woodford Fund - it started last year but it feels really secure and so far has performed well. I've probably invested in over 20 individual shares over the past year and TBH I'm not convinced that picking individual shares is the way to go for me. I've had a few big successes (growing 30-40%) but a few disastrous investments. I would rather get about 6-7% a year through conservative funds yielding high dividends (maybe a few bonds in there) and trading infrequently than going risky, trading often and trying to get 20% or something.
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Martin

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Reply with quote  #9 
Hey Grumpy, thanks for the post on the thread. It's interesting to hear some opinions about this subject of long-term investing.
I'll check out the Woodford fund for sure, you are based in the UK yeah? You put money in through your bank or through a trading platform like e-trade?

It's good to hear about your investment before as well. It sounds like having stable investments is best perhaps. The reason for me is that I just don't have the time to pick stocks and research them, or even be an active trader. I just need a path where a I can put the money away each month and forget about it. Hopefully as business grows I'll be able to put more and more away each time. 

But I still want to diversify and perhaps buy some bitcoins or gold or silver too.

For the overall formula to wealth and riches I think the plan is generally to build businesses, and be an investor. For the business we need to find a model that makes profit, and then scale up with the idea to eventually sell the company or go public. For the investment side of things the best method is to find long term funds / stocks and continue to add to it and let compounding work it's magic. But also avoid big losses when the market drops, and avoid big fees on things like mutual funds.

Once I've actually worked the formula I'll share it here for sure lol

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Reply with quote  #10 
Yeah I'm in the UK and I use a trading platform. From what I've heard being an active trader it is a load of work and it becomes more and more work as you get more money, so yeah I definitely agree it shouldn't be undertaken lightly. But I read something recently saying that when you start out trading you should actively manage it, that way you learn what kind of trader you are and what mistakes you're likely to make. Better to make those mistakes when you're only losing £100s than when you're losing £100,000s. I think it's bit like game development in that way - I've made mistakes in game development that I really thought I wouldn't, but unless you're actually making games - making mistakes and living the indie lifestyle you can't really judge. I'm glad I'm making those mistakes now and not when I've got a large staff and loads of investment.

Haha yeah that sounds about right for the formula to wealth and riches! Avoiding crazy spending too IMO. I've got friends who want houses but can't afford them, but they can afford massive lavish weddings instead! To me that just doesn't make sense! But hey ho, just my opinion.
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Martin

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Reply with quote  #11 
hey Grumpy, how are you this week? I hope things are well back home and not too cold. Just catching up on some posts now, sorry for the late reply.

Yeah it looks like active trading is really a full time gig. I barely have time to research funds let alone trying to do weekly trading. 
That's a good point about being active in the beginning. For example with the funds I have bought shares in, perhaps I should sell them soon just to go through the process.
It's true about games too. We need to make mistakes in order to succeed. I made a big mistake before when we spent about 10,000 GBP to build a game which took 7 months, and when it was launched it made less than $1 per day. A friend of mine did the same and spent 20,000 Euro on a skiing game which only made 400 Euro in 2 months :s
So for me it's not just about the product, ie the game, but also about the business system. This includes knowing how to do marketing, control costs, build times, distribution on which stores, growth plan etc.

I agree with your point about spending. It's super important. I read a post about the top tips for new company entrepreneurs, and one of the tops ones was 'keep costs low'. Another presentation Im watching now said that the biggest problem for new companies is cash, or lack of it. Cash flow, having cash, and keeping costs low is top priority for new businesses for sure.

On a separate point, one of the things I always question is 'should i be a serial entrepreneur and start many businesses, or stay focused just on a few or one?'. I always think about this and wonder if I should also explore other areas of business such as internet marketing, opening a coffee bar, real estate etc. A lot of the success stories I read are about guys who built several businesses like Mark Cuban. But then others had focus just on one business like Bill Gates. So i think I need to test out other areas without sacrificing my time. For example hiring someone to help me test out a new online business. This way I can remain focused on building Cobalt Play and Panda Tap whilst they work on testing the new business for me. 
I'm curious to hear what you guys think about this?

Chat soon [smile]
Martin

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Grumpy

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Reply with quote  #12 
Whether you do multiple businesses or not, I think depends on your personality type and skill set. I love game development because it has so many different things to master and learn, but if I got bored of it I would move on to something else. Equally if a company grows too big it can become a very different lifestyle - I would rather work somewhere with <50 people than in a huge company, but sometimes you have to let a company grow. So again if my company grew too big I might be tempted to sell and start a new one.

I think generally I'm more of a builder than a maintainer - but you've got to do a bit of both I reckon.

I've always been interested in property - renovating houses, renting them out that sort of thing - I think if I was to make a lot of money through game development I would invest in that.
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bestgamesstudios

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Reply with quote  #13 
Hi everybody! Sorry to dig up this old topic but I'm really interested in this money stuff.

I've read Rich Dad , Poor Dad and several other books by Robert Kiyosaki. I really love the Rich Dad & Poor Dad book's "mindset", don't "work at a job (just above broke), "mind your own business, instead of other people's business" (I've listened to the audio book and the tone is just amazing). However, his stuff is laced with recommendations of multi level marketing and taking on too much risk, so it's a mixed bag. I still love the book for the inspiration/tone.

I recommend "fooled by randomness" by Nasim Taleb

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Martin

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Reply with quote  #14 
Hey Bestgamestudios, sorry for the late reply, I've not checked this section in a while. Good to know you're interested in general wealth building too. It's something I think about all the time, not just with games, but generally the goal of getting super rich [smile]
I also read Rich Dad Poor Dad. A really good book with some great ideas. For example, the money quadrant - be a business owner and an invester, don't be an employee or a specialist. I think this is really true since as an employee we can never really get rich. Also being an investor mean that your money works for you. I started doing passive investment at the end of 2014 and I've been putting some money in to a mutual fund each month, but so far the percentage is negative lol. I don't have time to track specific stocks but maybe I need to start doing this at some point.

I read another really good book called How To Be A Billionaire by Martin S Fridson (I think that was his name). The book was good because it went in to the specific details of how these billionaires created their riches. ie. they held a big percentage of their company, they went public (on to the stock market), they used financial leverage (got investment to grow). It was good to read about it in detail because a lot of the get rich books don't discuss this, instead they discuss overview techniques and mindsets. That final point about financial leverage is something I need to work on because I've always resisted getting investment because I will lose some control, but perhaps it's a step I need to take if I'm to improve my career as a business owner.

I'll check out that book you recommended too, thanks [smile]

Chat soon
Martin


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Martin

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Reply with quote  #15 
Hey guys. I hope you're all having a great week. It's been a very busy few weeks here since we're now working on some larger games and some VR games too. All good fun though [smile]

I recently started a forum focussing on investment / getting rich because its something I alway think about and talk about. I remembered that we started a similar topic in this thread so I wanted to share the new forum with you guys. It's still in a super early phase and a lot needs to be figured out but hopefully the topics in there are interesting to follow. Here's the link:

http://howtogetrichinvesting.discussion.community/post/investing-in-your-own-business-is-the-best-way-to-get-rich-7797428?pid=1289890724#post1289890724

Don't worry about my work on this forum, I'll still be posting update videos on the Pro Section and I'll be doing another one this week. For one of our businesses our accountant is now helping me to do the revenue summary and it's really helped me to free up some time and build a forum focussed around the more general subject of investing, business, and getting rich.

Catch you on there.
All the best
Martin

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bestgamesstudios

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Reply with quote  #16 
Hi Martin! This is indeed a great topic! I have really mixed feelings regarding Kiyosaki - on the one hand, 95% of what he aspouses I agree with - the whole "mind your own business" phrase is now integral to me, however it's those few things that he also mentions that made me be really wary of him: he speaks positively MLM (multi-level marketing), and his general attitude is that it's great to take on large loans to buy real estate to rent out - however, he doesn't talk about the risks of doing that at all. That being said, Rich Dad & Poor Dad was a great read, but it's sort of like a tasty nutritious fruit with a spiky seed- one needs to know which parts to avoid.

I also recommend Nicholas Taleb - he has some great books/audiobooks which are humorous, fun and easy to understand.

Personally, my current "investment" is a mac mini which I recently bought to be able to publish apps to a certain store [smile]
I'm staying away from stocks atm - I'm still of the mindset that something might happen to the dollar in the coming years.


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Reply with quote  #17 
Net is full of great investment sites, why not start a forum focused on investing in game companies instead? Being focused on game companies would make those other forums turn into you as an expert - what a great way to gain readers and clients. That would enable you to produce courses, e-books and members section for those who want to learn more. For example your inside analysis of some new game (earning mechanics, will it retain the player, re-playability) or a new company analysis (future outlook, key personnel talent, list of titles) or trend analysis be it AAA titles, mobile games or browser games.
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Reply with quote  #18 
I remembered this topic and shortly visited the investing site. I see you are going the traditional technical trading route. Good way to trade if you have deep pockets for market moves, which shift daily trends. It is also profitable if you can affect the sentiment with news and rumors. Other than that machine trade with algorithms tend to dominate this segment. 

Martin, I strongly recommend you to stick to what you know, especially when picking stocks. I don't really know your background but seems to me that currently you do lots of games related development/publishing/marketing. When dealing with listed game companies you would also learn what kind of moves they are making and how that might affect to the general gaming market in near future.

In my previous reply I mentioned the fact of being an expert gives you certain benefits. What about focusing your investigative eye on Chinese NetEase or 163.com as it is known. They have high crossing games but most of them are for Chinese audience. Looks like this company means business on Western game markets also but lot of the information is behind the language barrier and there is general lack of understanding the Chinese gaming market (about 20 years ago I made a huge mistake of relying on Western game industry rules when negotiating with a Taiwanese MMORPG developer. Had I been wise enough to study the field for few more months, my financial situation would now be radically different).

Surely, Martin,  you would want to have a meaningful contact to real players inside game market. Which content do you think might caught the eye of someone who actually is able to decide where to place some seed money or make a sizeable investment?
1. Personal investment diary of a person who is documenting his learning process on how to invest.
2. Grass root analysis (what kind of games they have and how they make their money and how much they need to pay for their talent) of a Chinese game company, which might be mulling mergers and acquisitions as a way to gain a bigger slice of Western game markets.

I am pretty sure that this would strengthen your position when it comes to networking and getting investments for Cobalt Play. Furthermore you would learn to pick similar trends in other companies. For example Social Point has few games that are doing ok. They largely operate with investor money (now they have the revenue, but still, the business of investing into start-ups uses quick exits as the way to cash in NOT long term dividends). Those investors are now looking a way to cash in and as most of the business is just following what others are doing there is bound to be some talks with big game companies on selling Social Point. So what big name game company still hasn't tipped their toes into mobile gaming? There is that potential buyer...

Ok, sorry... turned into a rant, but I am just so baffled why would you go the investing for dummies route while you have the highway shortcut right in front of you.

Best regards
Jake
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Jake

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Reply with quote  #19 
One more try before I let this topic go [smile]

My friend owns a private investment fund that focuses on real estate stocks. He puts his OWN money into ETFs. I asked why and he said that it is VERY hard to make money with investing into stocks but LUCKILY it is comparatively much easier and 100% safe to charge people money for a service that helps them to invest into stocks. 

Here's hoping you all do well be it stocks or something else.
Jake
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Hello World v.2

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Reply with quote  #20 
I got some money into the stock market but i think you can earn mutch more these days if you invest on your own business [smile]
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Martin

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Reply with quote  #21 

@Jake - How are you this week? I hope development and work is going well there. Very sorry for the late reply to you post. I've also not caught up on this thread in quite a long time.

Yeah I think technical analysis is also the best way to go. And I think you are right about needing deep pockets to make any money in the short term. I recently did a few trades in January and lost money each time :s About 300 GBP lost I think. I wrote all the details down on the other forum in the investor diary section here: http://www.howtogetrichinvesting.com
I think for stock market investing you definitely need time on your side, or a lot of capital as you mentioned.

About focusing on game companies in the stock market. This is possible but from what I understand, investors who focus on technical analysis don't usually care about what the industry or company is, they instead focus on trend, price, and movement. However it is better if the person knows about the industry too.

For what you are saying about focusing on Chinese game companies, this would be more like fundamental analysis. Its possible for me to do this here, but it would take a lot more time than doing technical analysis i believe.

By the way, Im curious about the Taiwanese MMORPG you mentioned. Was you aiming to publish a game of there's over in the west?


Quote:
Surely, Martin,  you would want to have a meaningful contact to real players inside game market. Which content do you think might caught the eye of someone who actually is able to decide where to place some seed money or make a sizeable investment?
1. Personal investment diary of a person who is documenting his learning process on how to invest.
2. Grass root analysis (what kind of games they have and how they make their money and how much they need to pay for their talent) of a Chinese game company, which might be mulling mergers and acquisitions as a way to gain a bigger slice of Western game markets.
I am pretty sure that this would strengthen your position when it comes to networking and getting investments for Cobalt Play.


I agree with your point here, but this assumes that I'm looking for investment for Cobalt Play. At the moment I'm not looking for investors. If I was looking for investors it would be for a business which is already making profit and is looking for expansion capital. In this case I don't think it would matter if I was documenting my investing online because its not connected to anything I'm doing in my business.

Quote:

Ok, sorry... turned into a rant, but I am just so baffled why would you go the investing for dummies route while you have the highway shortcut right in front of you.


Lol, its ok. It's always great to hear others opinions on the subject of wealth creation and I always value your input [smile]
But to me its not baffling. It's quite simple - I'm exploring new ways to generate wealth and be an entrepreneur (set up multiple businesses). Also I know very little about investing in companies, M&A, buyouts etc, and so the path that you just mentioned above didn't enter my mind. I wouldn't know how to start something like that, how to make money in it, who would pay for it, and how to expand it. The reason I started the howtogetrichinvesting.com forum is because at the moment I'm a dummy in this area and its all I know what to write about. Eventually however Im hoping to get better and eventually narrow down my focus and specialize in certain areas.

Quote:
My friend owns a private investment fund that focuses on real estate stocks. He puts his OWN money into ETFs. I asked why and he said that it is VERY hard to make money with investing into stocks but LUCKILY it is comparatively much easier and 100% safe to charge people money for a service that helps them to invest into stocks. 


I agree with your friend. As I said I've lost money each time I've invested in the stock market. This could be due to the market being in a down trend at the moment though.
On the real estate point though, this is something I'm investigating now and might invest in this area either personally or grow a business in this area.

It's true that people should stick with what they know when it comes to their main business activity, but I think everyone should explore new avenues to make money. Start to explore new things but start off small, test the water, and then begin to expand if the numbers make sense.

Thanks again for the post Jake, I really appreciate your feedback in this area because im a total newbie when it comes to investment and the stock market.

@Hello World - I agree. I've invested the most in to building our mobile game business and I've made a lot more money than if I had invested that money in the stock market. I always tell people; if you want to be rich then build businesses (plural). I'm no super successful business person but based on my research and experience this is the best way to build wealth.

Catch up soon guys [smile]
Martin


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Grumpy

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Reply with quote  #22 
Three things I've learned from trading/investing.

One, from personal experience, is to be careful investing in companies in countries where regulations are less tight especially when it comes to things like accounts. I was burned when I invested in an AIM share, that's largely now believed to have been a scam or at the very least incredibly dodgy... the shares have been suspended at any rate. Luckily I got out before this happened and only lost a few hundred, but I had friends who lost more. You can make good money from emerging markets etc, but it comes with big risk.

Two, it does make sense to spread the risk. Your house, car, shares, business, bonds, money in the bank are all investments. If the stock market went all bearish and dipped massively, not all your investments will behave the same, your house and money in the bank might stay the same (or they might not), your bonds might rise, your shares might fall. I get what you guys are saying that you should invest in your business, or the games market, but spreading the risk by having different types of investments is sensible IMO. Maybe I'm just getting cautious, these days.

Three, I really think low cost funds are great. I know some people don't like them because of the fees and the impact this has on cumulative growth, but most of the funds I've bought into seem to have greatly outperformed the market so far.

I only have a couple of years investing in the market, I'm not investing huge sums, and I'm sure in a few years my approach will be totally different, but, yeah, just thought I'd share.
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