Any retirees spend too much and go back to work?

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hvaclorax
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Re: Any retirees spend too much and go back to work?

Post by hvaclorax »

I’m aware of 2 physicians who went back to work in the tech bubble timeframe. On advice of their accountant. Not a good thing.
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retiringwhen
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Re: Any retirees spend too much and go back to work?

Post by retiringwhen »

hvaclorax wrote: Thu Oct 28, 2021 1:25 pm I’m aware of 2 physicians who went back to work in the tech bubble timeframe. On advice of their accountant. Not a good thing.
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Bad investments by the physicians?
hvaclorax
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Re: Any retirees spend too much and go back to work?

Post by hvaclorax »

Well the bubble burst. They retired at the top. Then they got unretired. (If that’s a word.)
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HomerJ
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Re: Any retirees spend too much and go back to work?

Post by HomerJ »

hvaclorax wrote: Thu Oct 28, 2021 1:31 pm Well the bubble burst. They retired at the top. Then they got unretired. (If that’s a word.)
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That's why you have a good chunk in bonds\CDs\cash when you retire. So you don't get "unretired".
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hvaclorax
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Re: Any retirees spend too much and go back to work?

Post by hvaclorax »

HomerJ wrote: Thu Oct 28, 2021 2:13 pm
hvaclorax wrote: Thu Oct 28, 2021 1:31 pm Well the bubble burst. They retired at the top. Then they got unretired. (If that’s a word.)
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That's why you have a good chunk in bonds\CDs\cash when you retire. So you don't get "unretired".
Yup
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mnnice
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Re: Any retirees spend too much and go back to work?

Post by mnnice »

HomerJ wrote: Thu Oct 28, 2021 2:13 pm
hvaclorax wrote: Thu Oct 28, 2021 1:31 pm Well the bubble burst. They retired at the top. Then they got unretired. (If that’s a word.)
HVAC
That's why you have a good chunk in bonds\CDs\cash when you retire. So you don't get "unretired".
It depends on how aversive being unretired is. We retired spring of 2014. We stayed aggressive mostly stocks and we have both had some part employment. The result is that we have a net worth more than twice what we retired with and a much more relaxed lifestyle.

I’m not sure go hard and then quit is the greatest system for many people. Remaining flexible and not looking at re-entering the workforce as a failure. Never needing work more than it needs you might be a better goal.
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Re: Any retirees spend too much and go back to work?

Post by milktoast »

flyingaway wrote: Fri Oct 22, 2021 12:06 pm Yes. When your retirement plan (portfolio and speniding) is approved by Bogleheads, you are unlikely to run out of money and forced to go back to work.
That's true. But given the way some of those threads go, I think poor Bill G would have been encouraged to come out of retirement after divorce.
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Re: Any retirees spend too much and go back to work?

Post by MrCheapo »

It's ironic you said that but reposted twice
bhsince87 wrote: Thu Oct 21, 2021 9:38 pm I've been retired for almost three years.

I'm thinking about going back to work because I miss working with really intelligent people.

I know that sounds bad, and I feel a little guilty about saying it.

But it is what it is.
EnjoyIt
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Re: Any retirees spend too much and go back to work?

Post by EnjoyIt »

vitaflo wrote: Fri Oct 22, 2021 11:26 am
fortunefavored wrote: Fri Oct 22, 2021 11:14 am
vested1 wrote: Fri Oct 22, 2021 10:56 am
fortunefavored wrote: Fri Oct 22, 2021 7:09 am There was a long thread a while ago on this, and the conclusion seemed to be there were only 3 reasons people were "forced" back to work: divorce, large medical costs, and family support.

Everything else is something people can deal with if they choose to (downsize/move/etc.) - but those "big 3" can take a huge chunk out of your retirement funds in one shot.

In a way, it is heartening.. you plan for the 99% and if the 1% happens, well.. you deal with it. There is no perfect safety.
#4. People who think a $400,000 lump sum retirement is a "fortune", and spend like there's no tomorrow.

<snip>

Those co-workers who failed at retirement were friends for the most part, but lacking in even the most basic financial skill. A cautionary tale indeed. Kind of sad to see someone you know in their late 50's to early 60's hitting the bricks and looking for a job.
Ha, yes, of course you are correct.. if you started with a bad plan.. those people likely will be forced back into work. I should replace "people" in my statement above with "people who retired with a reasonable 25 to 35X expenses and a solid plan"

:)
There's a lot of hand wringing here about "will I have enough" etc, but I've always felt that except for unforeseen circumstances, anyone posting here will likely never run out of money, or even get close to it. Notice the examples given above are not Bogleheads. If you're here and following BH's principles, you'll be fine because you have the demeanor to care about your financial life. Usually that's all it takes to be successful long term. All the other stuff argued about here is mostly a rounding error.
I fully agree. If one got rich through living below their means and investing through the course of their career, more then likely they have the learned skillset to not outspend their portfolio. I suspect most of us will die with more money than we started with making our beneficiaries financially set.
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corn18
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Re: Any retirees spend too much and go back to work?

Post by corn18 »

We retired this past Mar @ 55 and have been overspending our budget by 52%. That does not include the $75k we spent on a new patio and landscaping or the $24k on the camper. We've gone from 100% in firecalc with room to spare to 76%. Uh oh.

Image
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sailaway
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Re: Any retirees spend too much and go back to work?

Post by sailaway »

EnjoyIt wrote: Thu Oct 28, 2021 3:07 pm

I fully agree. If one got rich through living below their means and investing through the course of their career, more then likely they have the learned skillset to not outspend their portfolio. I suspect most of us will die with more money than we started with making our beneficiaries financially set.
It will be a drop in the bucket to each of those charities. Although, they do get rather excited about a couple thousand each year, so I could be wrong about some of them.
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Re: Any retirees spend too much and go back to work?

Post by flyingaway »

corn18 wrote: Thu Oct 28, 2021 3:23 pm We retired this past Mar @ 55 and have been overspending our budget by 52%. That does not include the $75k we spent on a new patio and landscaping or the $24k on the camper. We've gone from 100% in firecalc with room to spare to 76%. Uh oh.

Image
Are you looking for a job now?
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corn18
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Re: Any retirees spend too much and go back to work?

Post by corn18 »

flyingaway wrote: Thu Oct 28, 2021 3:44 pm
corn18 wrote: Thu Oct 28, 2021 3:23 pm We retired this past Mar @ 55 and have been overspending our budget by 52%. That does not include the $75k we spent on a new patio and landscaping or the $24k on the camper. We've gone from 100% in firecalc with room to spare to 76%. Uh oh.

Image
Are you looking for a job now?
Nope. Have to figure out a way to not spend so much money.
Consistently sets low goals and fails to achieve them.
fortunefavored
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Re: Any retirees spend too much and go back to work?

Post by fortunefavored »

corn18 wrote: Thu Oct 28, 2021 3:54 pm
flyingaway wrote: Thu Oct 28, 2021 3:44 pm
corn18 wrote: Thu Oct 28, 2021 3:23 pm We retired this past Mar @ 55 and have been overspending our budget by 52%. That does not include the $75k we spent on a new patio and landscaping or the $24k on the camper. We've gone from 100% in firecalc with room to spare to 76%. Uh oh.
Are you looking for a job now?
Nope. Have to figure out a way to not spend so much money.
Do you know why you overspent? How long were you tracking expenses for? I think many people would be interested in your journey - maybe post a stand-alone thread!

I'm about a year in myself and my expenses are all over the place - mostly due to real estate transactions, moving, etc.. so I'll have a better idea next year of how I am doing.
retiringwhen
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Re: Any retirees spend too much and go back to work?

Post by retiringwhen »

fortunefavored wrote: Thu Oct 28, 2021 4:31 pm Do you know why you overspent? How long were you tracking expenses for? I think many people would be interested in your journey - maybe post a stand-alone thread!

I'm about a year in myself and my expenses are all over the place - mostly due to real estate transactions, moving, etc.. so I'll have a better idea next year of how I am doing.
I too am interested as we expect some pretty lumpy expenses just as retirement hits with housing and toys, etc... I actually have budgeted about a 25% overage for the first 3 years as part of the transition.

I am using TPAW/ABW approach that can factor in future budgeting to get more realistic spend rates.

I even planned out lumpy gifts to kids/grandkids, more extensive travel in the first decade, medical costs before age 65, etc. while at the same time planning a core baseline and discretionary budget. It is a good exercise as it is helping my spouse and me both verify our retirement investment/spend plan as well as force discussion on what we want to prioritize, etc.
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corn18
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Re: Any retirees spend too much and go back to work?

Post by corn18 »

I'll open the kimono a bit more.

This is what I used for planning retirement (and feeding firecalc):

Image

I used actuals from 2019-2020. Then I put some haircuts on the categories. Lesson learned: Putting a smaller number in the budget spreadsheet is not a good plan. Should have just planned from actuals.

We were doing pretty good in 2021 until July. Then we went on a spending spree. Clothes, cars and house. I know exactly what we spent money on, so no surprises. We are slowing down in Oct but inflation has hit gas and food pretty hard. Not really worried too much as we settle in for the long haul. If I put in $7k/mo, we go back to 100%. So we don't have to cut too hard.
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Candor
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Re: Any retirees spend too much and go back to work?

Post by Candor »

beyou wrote: Thu Oct 21, 2021 11:23 pm
HomerJ wrote: Thu Oct 21, 2021 10:54 pm
bhsince87 wrote: Thu Oct 21, 2021 9:38 pm I've been retired for almost three years.

I'm thinking about going back to work because I miss working with really intelligent people.

I know that sounds bad, and I feel a little guilty about saying it.

But it is what it is.
You worked with really intelligent people? Good luck finding that again.
Scary to retire unless you are Bezos/Gates rich.
I don't know, I think most wouldn't be scared with 0.1% of their wealth and the vast majority will never reach 0.01% of their wealth. If that is what it takes to not be scared to retire it's not money that is the issue.
The fool, with all his other faults, has this also - he is always getting ready to live. - Seneca Epistles < c. 65AD
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Re: Any retirees spend too much and go back to work?

Post by bhsince87 »

MrCheapo wrote: Thu Oct 28, 2021 2:45 pm It's ironic you said that but reposted twice
bhsince87 wrote: Thu Oct 21, 2021 9:38 pm I've been retired for almost three years.

I'm thinking about going back to work because I miss working with really intelligent people.

I know that sounds bad, and I feel a little guilty about saying it.

But it is what it is.
The programmers I worked with before are MUCH better than the ones I have to work with here. :beer
Time is what we want most, but what we use worst. William Penn
Patzer
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Re: Any retirees spend too much and go back to work?

Post by Patzer »

I am still a decade out from retiring, but I have a lot of older friends and I am also thinking of my parent's friends.
I can really only think of one and he didn't run out, but did overspend to the point where he started working at Sears 2 days a week to make a little extra money to stay on track. He has been doing that for a few years now, and it's a lot less pressure than the middle management job he left 15 years earlier.
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Re: Any retirees spend too much and go back to work?

Post by wrongfunds »

vested1 wrote: Fri Oct 22, 2021 11:18 am
fortunefavored wrote: Fri Oct 22, 2021 11:14 am
vested1 wrote: Fri Oct 22, 2021 10:56 am
fortunefavored wrote: Fri Oct 22, 2021 7:09 am There was a long thread a while ago on this, and the conclusion seemed to be there were only 3 reasons people were "forced" back to work: divorce, large medical costs, and family support.

Everything else is something people can deal with if they choose to (downsize/move/etc.) - but those "big 3" can take a huge chunk out of your retirement funds in one shot.

In a way, it is heartening.. you plan for the 99% and if the 1% happens, well.. you deal with it. There is no perfect safety.
#4. People who think a $400,000 lump sum retirement is a "fortune", and spend like there's no tomorrow.

<snip>

Those co-workers who failed at retirement were friends for the most part, but lacking in even the most basic financial skill. A cautionary tale indeed. Kind of sad to see someone you know in their late 50's to early 60's hitting the bricks and looking for a job.
Ha, yes, of course you are correct.. if you started with a bad plan.. those people likely will be forced back into work. I should replace "people" in my statement above with "people who retired with a reasonable 25 to 35X expenses and a solid plan"

:)
To add insult to injury, I'm sure that they had to take SS at age 62 out of necessity. I file for mine next year at age 70.
I can confidently bet lunch money that "they" are NOT participants here on BH either. I thought it was implicit in OP's question that he was looking for the group of people very much NOT like "they".
kleiner
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Re: Any retirees spend too much and go back to work?

Post by kleiner »

bhsince87 wrote: Thu Oct 28, 2021 11:04 pm
MrCheapo wrote: Thu Oct 28, 2021 2:45 pm It's ironic you said that but reposted twice
bhsince87 wrote: Thu Oct 21, 2021 9:38 pm I've been retired for almost three years.

I'm thinking about going back to work because I miss working with really intelligent people.

I know that sounds bad, and I feel a little guilty about saying it.

But it is what it is.
The programmers I worked with before are MUCH better than the ones I have to work with here. :beer
I too worked with a lot of smart people in the course of my career in AI research and I enjoyed working with them. And yet, I am very happy being retired. I still enjoy reading scientific papers and writing code - just not for work. Without the pressure of employment, I have been able to explore topics in areas like philosophy and biology that I never had the time for when I was at work.

As far as interacting with people, I am currently mentoring a bunch of tech startups who are participating in an incubator. This has been a very enjoyable experience for me, much more fun than conventional work.

I realize that the OP specifically asked for negative stories about retirement but I think there are many more successful early retirement stories. Not everyone retires just to play golf and watch TV.
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Re: Any retirees spend too much and go back to work?

Post by quantAndHold »

My neighbor retired from one of the big banks in 2007, with his entire 401k invested in his company stock. Fortunately, he had only been retired a few months when his 401k lost 98% of its value, and was able to get his old job back. He retired again in 2019, his 401k still 100% invested in his old company.

So no, he learned nothing.

Working in tech, I’ve known lots of people in similar situations, which I why I cringe when the tech bros come here and brag about how their RSU’s are worth. That stuff can turn on a dime. I retired at 52 because I stayed diversified. Concentration risk goes both ways.
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Re: Any retirees spend too much and go back to work?

Post by flyingaway »

If high inflation persists a few years, you will see a lot of us look for jobs.
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Re: Any retirees spend too much and go back to work?

Post by ScoobyDoo »

vested1 wrote: Fri Oct 22, 2021 10:56 am
These same individuals always had their dividends in their 401k's distributed every December, calling it "free money" to be spent on expensive Christmas gifts they couldn't otherwise afford.
Was this really possible before????
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Re: Any retirees spend too much and go back to work?

Post by ScoobyDoo »

[/quote]

The programmers I worked with before are MUCH better than the ones I have to work with here. :beer
[/quote]

One developer asked me how we ever solved problems before stackoverflow.com and other such tech comment boards. :confused :shock:

I gasped in horror! After a few seconds contemplating a response I just said, one went to college to get those problem solving skills. And just left it at that! :? Long live the future!
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Re: Any retirees spend too much and go back to work?

Post by goblue100 »

mptfan wrote: Fri Oct 22, 2021 8:57 am
beyou wrote: Thu Oct 21, 2021 11:23 pmScary to retire unless you are Bezos/Gates rich.
No, I think you could retire without being scared if you are Jimmy Buffett rich.
jimmy Buffet is pretty rich. Margaritaville has been kind.
Buffett is one of the world's richest musicians, with a net worth of $550 million.
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Miriam2
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Re: Any retirees spend too much and go back to work?

Post by Miriam2 »

corn18 wrote: We retired this past Mar @ 55 and have been overspending our budget by 52%. That does not include the $75k we spent on a new patio and landscaping or the $24k on the camper. We've gone from 100% in firecalc with room to spare to 76%. Uh oh.

Image

Well, corn18 - I did notice that you not only did NOT overspend on Health and Beauty, but you spent the same amount 8-) so I would say you're still feeling and looking fine! Plus, you spent only a little more on entertainment, miscellaneous and your poor pets. What happened with the house, food, clothes, and auto (other than the patio & garden installation and camper purchase) that overdid the plan so much?
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Re: Any retirees spend too much and go back to work?

Post by vested1 »

ScoobyDoo wrote: Fri Oct 29, 2021 11:10 am
vested1 wrote: Fri Oct 22, 2021 10:56 am
These same individuals always had their dividends in their 401k's distributed every December, calling it "free money" to be spent on expensive Christmas gifts they couldn't otherwise afford.
Was this really possible before????
The megacorp I worked for gave employees that option, the dividends were from company stock, which most employees were over-weighted in because matching funds in the 401k were directed to company stock, and buying company stock within the 401k was considered a gesture of loyalty to the company by many. Those individuals who took dividends usually never diversified, some even after they retired. The Enron fiasco should have been a wakeup call, but many slept right through it, trusting the "company store" to their own eventual detriment.

To add insult to injury, those dividends were considered income, as they should have been, and thus taxed, whereas reinvesting the dividends would have resulted in more growth and deferred taxation. I sat down with a couple of friends soon after we all retired at their request, and we shared our 401k balances as part of the conversation. We had talked about the choices and amounts we were contributing while still working, which were virtually identical, so we should have had roughly the same amount in our 401k's. They didn't understand why my balance was so much higher than theirs until I asked them what they did with their dividends over the years, and they both related how much they had looked forward to that "bonus check" every December. I had made the same basic mistake of being over-weighted in company stock, but had reinvested my dividends rather than spending them like they did.

I finally sold all my company stock and diversified when I realized the danger of having too much concentration. They took longer to come to the same conclusion and lost money on the dip which never regained its past highs.
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corn18
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Re: Any retirees spend too much and go back to work?

Post by corn18 »

Miriam2 wrote: Sun Oct 31, 2021 10:18 pm
corn18 wrote: We retired this past Mar @ 55 and have been overspending our budget by 52%. That does not include the $75k we spent on a new patio and landscaping or the $24k on the camper. We've gone from 100% in firecalc with room to spare to 76%. Uh oh.

Image

Well, corn18 - I did notice that you not only did NOT overspend on Health and Beauty, but you spent the same amount 8-) so I would say you're still feeling and looking fine! Plus, you spent only a little more on entertainment, miscellaneous and your poor pets. What happened with the house, food, clothes, and auto (other than the patio & garden installation and camper purchase) that overdid the plan so much?
House is furnishing a new house. Food was ignoring actuals and hoping we spend less. Same with clothes. Auto was a combo of higher gas prices and me doing mods to my truck.

House will come down as we get it decorated. Food and clothes will stay. Truck is all blinged out. I left the actuals in for the next 5 years, though. Then I bring down auto and house.

Clothes is a mystery. We have spent $8k on clothes so far this year and I have no idea what we bought. I just bought 2 t-shirts and 2 pairs of Crocs.
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Re: Any retirees spend too much and go back to work?

Post by bradinsky »

corn18 wrote: Mon Nov 01, 2021 6:33 am
Miriam2 wrote: Sun Oct 31, 2021 10:18 pm
corn18 wrote: We retired this past Mar @ 55 and have been overspending our budget by 52%. That does not include the $75k we spent on a new patio and landscaping or the $24k on the camper. We've gone from 100% in firecalc with room to spare to 76%. Uh oh.

Image

Well, corn18 - I did notice that you not only did NOT overspend on Health and Beauty, but you spent the same amount 8-) so I would say you're still feeling and looking fine! Plus, you spent only a little more on entertainment, miscellaneous and your poor pets. What happened with the house, food, clothes, and auto (other than the patio & garden installation and camper purchase) that overdid the plan so much?
House is furnishing a new house. Food was ignoring actuals and hoping we spend less. Same with clothes. Auto was a combo of higher gas prices and me doing mods to my truck.

House will come down as we get it decorated. Food and clothes will stay. Truck is all blinged out. I left the actuals in for the next 5 years, though. Then I bring down auto and house.

Clothes is a mystery. We have spent $8k on clothes so far this year and I have no idea what we bought. I just bought 2 t-shirts and 2 pairs of Crocs.
DW must be dressed to the nines & look fabulous 😁
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Re: Any retirees spend too much and go back to work?

Post by afan »

HomerJ wrote: Thu Oct 28, 2021 2:13 pm
hvaclorax wrote: Thu Oct 28, 2021 1:31 pm Well the bubble burst. They retired at the top. Then they got unretired. (If that’s a word.)
HVAC
That's why you have a good chunk in bonds\CDs\cash when you retire. So you don't get "unretired".
That helps protect against a stock market crash. Not so good if there is high inflation.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
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