When Kris was young, her family moved all of the time. Her father was in the Air Force, so they were rarely in one place for long. I, on the other hand, have always lived within the same 25-mile radius. For 41 years. More and more, I feel the itch to live somewhere new, if only for a little while. In fact, I wish I’d lived elsewhere when I was younger.
But moving (and living in adventurous locations) comes with a cost. In fact, A.M. wrote last month asking for advice on just this sort of situation. She has a chance to live in another country, but she’s worried about the financial implications. Here’s her story:
I’m planning what will be a big move — both literally, and financially — but the money side of things is giving me some concern. I’m 25, self-employed, debt-free aside from my student loans, and have built up around $15,000 in savings. Now a great career opportunity has presented itself, involving a move to a new country: I’d be moving from London to Los Angeles.
Because I’m freelance and would continue all my current contracts, it wouldn’t involve any drop in my income (only increase my potential for future earnings), but it would involve a lot of new costs; not just one-off immigration and relocation, but new monthly expenses. I would have to rent a room or apartment, and then run a car for the first time (I’d need it for work), and also pay for health insurance. My savings could cover all of these expenses, but I’m a little wary of draining that fund.
On the other hand, I’m young, this is an incredible opportunity, and my job means that just one new contract could easily restore those coffers… I’m excited by the new prospects — for my career, and also the adventure. Do you have any advice that could help me manage this big change, and keep the financial side from spiraling out of control?
I think the most important thing A.M. can do is pay attention to cash flow. Cash flow is what you earn minus what you spend. If you make more than you spend, you have positive cash flow. if you spend more than you earn, you have negative cash flow. Positive cash flow lets you build wealth (even if it’s slow progress), but negative cash flow depletes your savings, and eventually leads to debt.
A.M. know she’s going to have a lot of new expenses in the future. What I want to know is how these expenses compare to her future income. It may be that even with housing, transportation, and insurance, she’s still able to maintain a positive cash flow. If that’s the case, my advice is absolutely to seize this opportunity.
But if these expenses will be more than A.M.’s current income, that changes things. If she’s going to have a negative cash flow, she’ll need to consider her priorities. I think that a small negative cash flow shouldn’t be a big concern, but if she’s losing $1,000 or $2,000 a month (or more), she’ll need to decide how long she’s willing to stick this out. How much is this opportunity worth to her?
I also think that A.M. should do what she can to keep a close watch on her finances. She should track her spending regularly in order to make sure her cash flow stays where she wants it. By keeping a close watch, she’ll be able react quickly if she does spot trouble.
What advice can you offer to A.M.? Given what she’s told us, what can she do to keep costs low? Is the opportunity to travel worth depleting savings? Taking on debt? Should she look at this as an investment in her future? And what would you do to keep costs low so she can hold on to her money as long as possible?
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I second the comments about the immigration complications as far as working here.
You MUST talk to an employment immigration attorney in the States. My wife is an immigration attorney, and the rules are insanely complicated. My good friend also has his work visa, is working on permanent residency, and it’s costing him a lot of money (and his firm is paying a great deal of the costs!).
I say do it…but be sure to get legal help.
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My husband and I did the opposite 3 years ago – moved from Boston to London. I came with nearly $40,000 in cash – savings and proceeds from the sale of nearly everything we owned. While it’s not always been easy, and we’ve burned through most of that savings, I’ve never, ever, ever regretted it. It’s changed my worldview. I’ve had unbelieveable opportunities I couldn’t have had at home. I’ve made fantastic new friends from around the world. It’s the best thing I’ve ever done.
The hardest bits:
- Being far from family. My father’s been very ill lately. And while I have tons of UK vacation time, I can’t afford with too many £600 ($850) plane tickets. That sucks – and it will bring me back to the US because my heart breaks thinking of my ill father and my inability to spend time with him and my other family members.
- Managing finances in 2 currencies. All my debt (student loans) and assets (401k, stock) is in USD, and all of my income/operating expenses are in GBP. Nightmare. But we manage.
That said, it’s all been so worthwhile. Even though it’s not forever, it will be a time I always treasure. Plus, I think it will be brilliant for my CV/resume going forward – the cultures are definitely different! Quite a skills-building experience for those of us in internationally-focussed careers.
Do it!
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Jason (#50), that is just too funny!!! Hahahahaha!
To A.M., go for it. You’ll regret it if you don’t. Just be willing to live with a roommate and live uber-cheap until your cash flow is positive consistently. Good luck!
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I have actually turned down two job opportunities abroad because the finances just weren’t right, so crunch your numbers carefully. I wasn’t willing to live in a crappy apartment eating ramen noodles just to have an intl experience – you need to think about what makes you really happy on a day-to-day basis and how flexible you are on living conditions and stress adapting to a new culture.
That said, at 25, if you just want to have a fun experience for a year or so, there’s probably a lot less risk. I was contemplating my moves as permanent ones.
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- Do it now, before I’m encumbered by family commitments and other financial responsibilities.
This is a big part of my reasoning for taking the plunge. I feel like in a few years, I’ll be focussed on putting down roots – saving for mortgage, retirement etc, and in more serious relationships. I’m as footloose as I’ll ever be, and having lived abroad already (months here and there in Massachusetts and Montreal) I know just how rewarding the experience can be.
- Taxes, taxes, taxes.
Thank you so much for the reminder: I’ve been focussed so much on visa issues, I haven’t given much time to thinking about switching all my tax and business registration around. I’ll definitely be hunting down a good advisor, and having some long conversations before I move out, so I can get as much set up as possible before I go – and be fully aware of my new liabilities and how my foreign income will be handled.
(For those interested in my employment specifics, I’m freelance, but work on only 2 or 3 big projects per year. My existing clients are based both in the US, and UK, and I work remotely, but this move is so that I can transition to a slightly different type of work, which will require face-to-face meetings, more collaboration, and for me to pitch for projects in person for the first time.)
- Save more.
From your experiences, it looks like there are always unforseen expenses, so as well as planning spreadsheets of predicted income/expenses, I’ll be doing my best to save whatever I can over the next months. I’m letting my current lease expire this month, and moving in with my parents until I leave for LA in September, rather than pay rent on a short-term place in the city, so that will be some additional savings.
- Credit.
I’ll definitely be checking into this. I have a US bank account, from when I lived there in 08 – I’ve kept it in credit, so I’ll see if this will help my credit rating at all. It’s some form of financial history, at least.
- Cost of living.
Well, at least this is a plus: I’m coming from a very expensive city, so it looks like I won’t be shocked too much. I’ve been careful budgeting for London costs over the last years, so hopefully, this will set me up to be similarly frugal in LA.
As many of you suggest, I’m planning to find a cheap room to sublet for my first few months, but in an area I might settle in – this way, I’ll have a chance to get a feel for the neighbourhood, and going rental rates, before making any big commitments. If I can find a furnished room, it should also give me some breathing room to shop around for the best deals on furnishings etc, so I don’t make any costly mistakes because I have to have things asap.
Thanks again for the tips – I’ll be checking back in and rereading to see if there’s anything I’ve missed.
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I have moved and studied abroad several times, and it is a wonderful experience that shouldn’t be evaluated solely on a financial basis. Savings can be replaced through hard work and diligence; you may never have this opportunity again.
However – do make sure you talk with an immigration attorney before you make your financial plans. Certain types of visas lock you into working for one employer and don’t allow you to moonlight. Some have limitations on travel. It’s extremely complex, and this is coming from a tax lawyer.
Another thought – we had a family friend from England who made it a point to get his routine physicals and any expensive medical care while he was visiting family in England. He may have also used his English citizenship to get medications in England. This apparently saved him a lot of money, since the U.S. health care system is notoriously expensive.
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You’re from England so you might not be familiar with the Golden Girls but Bea Arthur’s charactor has some advice for you
“If you take a chance in life sometimes good things will happen, sometimes bad things will happen, but sweetie if you don’t take a chance nothing happens.” – Dorothy Zbornak, Season 1, the Golden Girls
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@JC #36 — DITTO!!! I have been here 8 years and have “no history”. I have been paying back my student loan perfectly for 3 years and just paid it all down. And yet, nothing. Just rental inquiries for apartments. A listing of bank accounts, yes. But nothing that establishes me as a good payer. Any idea what the heck is up with that??
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A.M. it looks like you already know what a great opportunity it is to live abroad. I’m originally from LA, but I spent about a year in London and about 5 years in Tokyo before finally finding my way back to LA, so I guess my experience might be able to help you out.
-I think it goes without saying, but be prepared for the weather…as in how beautiful it is. We have a joke out here that you know someone is from California when they feel like they have to apologize for the weather (e.g. I’m sorry that it’s raining/cloudy today.)
-If you’re into outdoor sports you can pretty much do any imaginable outdoor sport within a 1-2 hour drive: ski, snowboard, hike, bike, surf, swim, scuba dive, dune buggy in sand dunes…year round ;p
-It’s been a while since I was in London (back when the GBP/USD rate was around 2 then), but London was much, much more expensive than LA (it even made Tokyo look reasonable by comparison). I would be very surprised if you cost of living went up…in fact, it should go down by quite a bit…especially if you follow most of the tips that you’ve picked up on this blog.
-I’m not sure what your tax rate is in the UK, but I would imagine that you shouldn’t be too shocked by taxes here in LA (depending on your write-offs and tax bracket, it may go down). You also have the benefit of avoiding global taxation, which the rest of us Americans enjoy (and I got to enjoy while in London and Tokyo).
-LA gets a very bad wrap in terms of public transportation; granted, it’s not as good as it should be for a city of this size, but if you live close to the city center, then you should be very well covered. I personally bike to work or take the bus/train to work on rainy days (read: very seldom in LA). As long as your commute is not too far, and you plan well in advance, you should be fine. (Then again, I am a bit biased against the Tube…I used to walk from Faringdon to Liverpool Street even when it rained, which as you know, was often in London…)
…but you should still have a reasonable, reliable car when you want to get out of the city, and be prepared for traffic at even the oddest of times.
Otherwise, good luck on your decision, I really hope you come out here and fall in love with this city like the rest of us Los Angelenos!
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I live in LA – I absolutely love it here. It’s not perfect and is not without it’s headaches, but go for it! I think you’ll regret it if you stay in London.
I moved to LA from Pennsylvania with only $3000 saved and no car. I was able to get a job pretty quickly and an apartment soon after (lived in a cheap hostel in the meantime). I didn’t buy a car for five years. Life without a car is a lot easier if you live near where you’ll be working (even if it’s a little more expensive), and live near either a regular car rental place (Enterprise runs a great deal in the off season for a compact picked up Friday and returned Monday morning for $30) or near one of the Zip Car locations, so that you have quick and easy access to a car when you really need one.
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If you don’t take this opportunity, you will wonder for the rest of your life what would have happened if you did. You can always go back to London if you decide you hate LA.
Is it possible to spend at least a couple of weeks in LA for advance planning? That could be really beneficial, rather than just showing up in town all at once without a place to live and a few local contacts. There are ways to live in LA that can save you money- listen to the LAers here for their advice. LA can be a very materialistic place to live, so be prepared to feel the consumer-driven culture there pretty intensely. It drives a lot of people’s decisions and impressions of you there. There’s also great food, art and culture there. Make the leap. You’ll be glad you did.
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You will definitely enjoy it here (and it is very different than Boston). Just remember to leave before you get too soft.
(And, sunscreen is definitely a must.)
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Do it do it! I love living in Los Angeles, though I’m a native, so I’m biased.
Be sure to look into living near where you work. I live Downtown, which is a great up-and-coming neighborhood with a lot of good rental deals out there if you look. Downtown also has the best transportation in the city as far as the subway, light rail, bus and commuter rail lines. Check out metro.net for maps and such.
If you’re looking for an affordable area to live in, check out Koreatown/Wilshire Center. It has great subway access plus central location to Downtown, Miracle Mile, and Century City.
It also kind of depends on what kind of lifestyle you want to lead. You don’t need a car if you live in the central LA area, with some planning. Westside, I’d say getting a car is definitely mandatory. Central LA also has great, super-cheap food (Korean, Mexican, Japanese, Thai).
LA is most definitely cheaper than London, and I disagree with the commenter that said LA is more expensive than New York. That doesn’t add up, even with car costs. Not by a longshot. Good luck!
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London = big, expensive, relatively diverse city in Great Britian
L.A. = big, expensive, diverse city in the USA
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I say go for it. I’m not a huge fan of the City of Los Angeles per se (as a Cali resident who has lived along the coast all over the place between San Diego and the Bay Area, I feel I can make that opinion with merit).
But I cannot argue with the benefits of living overseas (I spent 4 years in Japan), and the wonderful things that LA can offer (great climate, decent beaches, sporting events galore, terrific food, unique cultural opportunities, and potential weekend getaways to numerous beaches, mountain ski/snowboarding resorts, Las Vegas, etc.).
My time in Japan helped change my perspective of life. I learned to appreciate the benefits of US citizenship, while also gaining an understanding of ways that America could improve. I got to learn about a totally different culture, different customs, and a different language (this applies, as British English and Los Angeles English are not even remotely similar).
If you do it and hate it, you can always move back home knowing you took a chance.
If you don’t do it, you may regret it for the rest of your life.
It’d be an easy choice for me.
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Make the move in your 20′s! Make your move in your 30′s! Settle in your 40′s!
London is CRAZY expensive. LA will seem like everything is 30% off, trust me on this one.
Oh yeah, NYC is more expensive than LA for sure, but London is more expensive than NYC!
Best,
Samurai
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It sounds like a fantastic opportunity. I’ve lived in several states in the US but never overseas — something I’d love to do.
Try to find a share in an existing apartment — folks are always looking for a reliable person to share the rent with. I think you’ll have trouble getting credit or signing a lease on your own, since you’re not yet in the US system — you don’t have credit established here. Many of my co-workers are from overseas, and I’ve heard horror stories about getting started in America.
But don’t answer roommate ads in the newspapers — too many crazies out there. Try to find someone who knows someone in LA.
And don’t be afraid to work that charming British accent I assume you have. Folks in America will be entranced. It will open doors.
Good luck!
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I moved from London to Los Angeles in 1981, aged 26, with $300 cash and 3 suitcases, 2 of which were filled with reprints (Im a scientist). I had never driven a car so if you can drive thats good. I had to learn in Orange County and it took 6 months-I took the bus otherwise. Bought an old LM Capri for $2,000-a lot of $$ at that time. So-you do need to be comfy driving on the OTHER side of the road and you should get a cheap car. I rented a room with someone-I was a postdoc and we were not paid well. I was at UC Irvine-universities have housing offices where you can inquire if people need roommates or have apts to rent. These are much better than putting an ad in the paper-I agree. Get a credit card and establish credit right away. Im a little worried that you are a freelancer-I had a job lined up which eased my way greatly, and I do know people who had a terrible struggle as they tried to move to the US without a job o go to. Go for it, but research this aspect of things first-the 2 agencies you dont want to mess with are the INS and the IRS.
The big surprise for ME was that in the US you need first & last months rent AND a security deposit in cash, to rent-you didnt need all that in the UK when I lived there (I grew up there)-it may have changed in the UK, but if not it can be a nasty shock to be hit with essentially 3 months rent all at once.
My accent opened doors too! I still have it: it still does.
My thoughts on LA are this. If you are from London at first you will hate it as it is so spread out and you have to drive everywhere. It took me 9-12 months to adjust. But once you find your feet and make friends, it is very seductive, and you will love it as I do. Life here is very good, there are loads of nice normal people (it is not all crazies), it has excellent cultural and other resources, it does not pretend to be what it isnt-ie NYC -not does it care it is not NYC-and you wont want to leave. It is diverse and tolerant. I have lived in Seattle, Maine, and Philly since then, but am now finally back in Southern CA for good. I miss the history in Europe but cannot see myself going back to London. Why? When you can drink champagne at Sunday brunch sitting on a patio on the hill in Laguna Beach looking at Catalina Island IN DECEMBER?
Be prepared for CULTURE SHOCK. Just because Americans speak English it does NOT mean they think like the English-they dont. For me it was very liberating, and the transition was eased by the language (I lived in France for a few years so Ive had to do the transition to a different language), but there were pitfalls when I realized I had made incorrect assumptions.
One MAJOR pitfall is that England is not really a democracy and the US is. If you even suggest a snobbish approach it puts people off. Some of my English mannerisms and ways of looking at things have had to be modified or discarded as they caused major offence. As a manager I am still working on this.
Bring sunscreen AND shades AND a hat-sun will damage your retina-it is intense in CA.
Do not worry about the seismicity-nobody here does. I remember being told by a religious nut in NYC in late 1982 that prophecy said CA would fall into the sea in 3 years. It hasnt happened yet…….. I admired his certainty and only wish I could point out his error now. Of course, the Big One MIGHT happen this afternoon but there you are, I am not worrying about it.
THis is a long ramble, more philosophical than financial-if I think of anything else I will post again.
Oh yes, I am a great road crosser at random places on roads due to practice in Europe-dont do it here-I did it in Newport Beach and got ticketed for jaywalking! If you want to walk, cross streets at intersections…..
Re areas to live in, close to a university might be worth considering as they all have temp offices, housing offices etc where you can inquire if you need a temp job to make extra cash, find a cheap apt etc, plus cultural and social resources. So look into Westwood (UCLA), Orange County (UC Irvine), the Pasadena area (Caltech). The area around USC is NOT good however.
Oh-I do miss the Indian food in London! I grew up in Southall. Artesia is great tho-it is just like Southall Broadway!
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Additional thoughts:
Check your visa is the right one: There is a Brit Consulate in LA which you can inquire at for related items if you need to-they can help you with issues re getting settled here.
UK Passport renewal is in DC however, by mail-it works fine (they used to d it at the LA office but not any more). Check the renewal date.
Check your tax obligations vis a vis UK/US, be knowledgeable on this
Go online and research communities-there are bad ones in LA. In 1981 I arrived here pretty clueless as there was no internet-my destiny dumped me in Orange County. Luck or what? It might have dumped me in Fresno….. or Stockton…..or Victorville……
You will need a car: rent or buy used, reliable (Japanese imho), Inquire about drivers license.
You will need first/last months rent + deposit to rent an apt
Personal introductions help, and you will need a mailing address in the US when you get here, even if its just a hotel, as they ask this question on the entry forms, so look into that.
get CPA for tax help
You will need a phone/internet connection-get Intl calling on your phone
Maybe come out for a week to check it out-I interviewed here so that was really helpful.
Look at a map-LA is HUGE so is CA (LA to SF is ~ the same as London to Edinburgh)-so is the US-the scale will put you all out of your reckoning at first
Cost of living: try 1-800-Got-Junk-they donate the stuff they haul away-having just bought a smaller condo I recently gave away much almost new good quality furniture. No need to buy new. And dont rent furniture-you will get gouged.
Be prepared for people being much more open, friendly, and seemingly intrusive than in the UK. Im rather reserved by preference and this took getting used to.
Bring clothes to layer-it starts off cool, heats up, then cools off again. Layering works best to manage the temp changes. Nights can be cold (So Cal is a desert) and we are having a cool year this year, freezing in fact, so a jacket or light raincoat will help.
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More thoughts:
Check your visa status. Theres a Brit Consulate in LA that is helpful if you need advice on issues related to staying here.
Please please make sure you can come here legally as a freelancer-I concur with the remarks about talking to an immigration attorney-I always advise having a job lined up here first if you want to move long-term
Check renewal date on your passport: renewal is in DC by mail
Check tax status and obligations
Have first and last + deposit in cash to rent anywhere to live
Entry papers require you to have a mailing address here even if its just a hotel
Get a personal introduction if you can-it helps
Take a trip out here if you can, to check it out-I interviewed and it helped a lot
Do research-we didnt have the internet in 81-I cant believe how clueless I was-but I did OK-destiny dumped me in the OC-it might have been Fresno or Victorville. Luck or what?
Get intl calling on your phone
Look at a map-LA, CA and the US are huge and the scale takes getting used to-LA-SF is ~ the same as London to Edinburgh. Think of San Francisco as “Scotland”. And NEVER NEVER EVER refer to it as “Frisco” as I have actually heard some people do… Eek! it makes my skin crawl.
RE cost of living you can get furniture by calling 1 800 Got Junk-they donate what they haul away-I just downsized and gave away a lot of good quality almost new furniture (alas). Dont rent it, you will get gouged
Living by the beach costs more, inland is cheaper
If you need to commute, do it against traffic. I have a roughly 10 minute commute against traffic both ways through a part of LA that looks like countryside-I love it, it helps me think.
Bring a teapot….and maybe some good tea (if you like tea). It is not as good here, and decent teapots can be hard to find….Tea cosies impossible-I got mine at Liberty….
Gas (petrol) is still cheaper here than in London…..
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Gas (petrol) is still cheaper here than in London….
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AM,
I am no tax expert but am pretty sure you will have to file and pay for all taxes in the USA. If you are outside England for more than 180 days a year you won’t have to pay and English taxes, I believe.
Figure the US total tax burden will be about 35 – 40% of your income (Federal + State + social security + medicare + unemployment + any local taxes), the US likes to charge this way.
-Mike
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AM,
While you are thinking about your decision you can listen to this tune:
http://www.youtube.com/watch?v=SBcADQziQWY
If you go to California, be sure to check your brain.
-Mike
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AM,
I am so envious of you!!!
I went from Australia to London in 1997 with a suitcase and a small amount of money. I knew nobody and had three days accommodation booked.
I wish I was starting out on that kind of adventure again. Sure there were some bad times, I was really sick with flu one day and feel over on my way to the hospital and sprained my ankle so bad I had to wear a cast for three weeks….
But I met friends that I am still in contact wiht today and have had a steady stream of visitors since I moved back in 2000.
Through the people that I met I was able to work in a number of great places in London and that lead me to a job in Dublin in the middle of the Celtic Tiger, what an awesome time to be there!
I know you are worried about money and insurance and taxes etc etc, but seriously, if you are a cautious person you will always be sensible with money, so just take a deep breath and GO FOR IT!!!!
Oh and I don’t know which commenter it was, but totally agree that you need to stay at least six months. A friend of mine came over, missed her boyfriend too much and went back after six weeks, of course her and boyfriend broke up and she never went back to London.
You have the chance to reinvent yourself to be more or less of anything you want, want to be more adventurous, go right ahead! Want to be less messy, give that a go. Want to be the type of person who gives intimate dinner parties, sure, why not!
S
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Hey A.M! I was in a similar situation 3 months ago and I went for it. I quit my job in Alabama and moved to LA. (With fewer savings than you!) It’s possible! Just plan wisely and go for it! Time waits for no one so be the go getter that you are!
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