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McGavin posted:Sure, carrying a loss back 3 years is fine, but what's really wild is that you can carry forward a loss to apply it against any profit that you might make over the next 10 years. You sure it's 10 years and not indefinitely? I've heard the latter a bunch of times
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# ? Nov 25, 2022 01:17 |
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# ? Jun 8, 2024 08:02 |
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Oops, sorry it's 20 years.
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# ? Nov 25, 2022 01:24 |
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I did that whole rigmarole once, but only because I had switched to a one-fund portfolio and there was an opportunity to reduce the tax hit of that
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# ? Nov 25, 2022 03:26 |
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Re. rationale on paying down the mortgage, we were up for renewal so we could make a penalty-free payment. I’m not sure it was financially optimal compared to accepting a higher interest rate and hoping to win out with the investments increasing in value, but it’s close enough I’d have to actually calculate it out now with the benefit of knowing exactly what the market did. At the time it was more about reducing our risk than anything, since we didn’t know if markets would rebound as rates went up (we could have lost on both fronts) and we had a relatively short window (1-2 years) in which we were hoping to be spending money on a new home. If we were only looking long term I’m not really sure if we would’ve done the same thing. We also had no idea if house prices would start coming down, so whether we needed the TFSA for that or for retirement was also up in the air. I guess put us in the “psychological safety” bucket, not so much number crunching. In the end we’re moving next month and did need the full home equity, but we don’t need anything more out of our savings, so I think it worked out okay?
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# ? Nov 26, 2022 01:11 |
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McGavin posted:Oops, sorry it's 20 years. That’s for non-capital losses (rental, business income etc). You’re very unlikely to have business losses from tax loss harvesting on portfolio investments. If you do, you need a professional accountant and not a comedy forum.
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# ? Nov 26, 2022 02:05 |
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kaom posted:Re. rationale on paying down the mortgage, we were up for renewal so we could make a penalty-free payment. I’m not sure it was financially optimal compared to accepting a higher interest rate and hoping to win out with the investments increasing in value, but it’s close enough I’d have to actually calculate it out now with the benefit of knowing exactly what the market did. At the time it was more about reducing our risk than anything, since we didn’t know if markets would rebound as rates went up (we could have lost on both fronts) and we had a relatively short window (1-2 years) in which we were hoping to be spending money on a new home. If we were only looking long term I’m not really sure if we would’ve done the same thing. We also had no idea if house prices would start coming down, so whether we needed the TFSA for that or for retirement was also up in the air. I guess put us in the “psychological safety” bucket, not so much number crunching. Financial security is worth it. It's life, not minmaxing a number.
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# ? Nov 26, 2022 02:39 |
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fisting by many posted:Financial security is worth it. It's life, not minmaxing a number. Paying down a mortgage is also effectively a risk free return, assuming you’re not in Alberta/Saskatchewan or another jurisdiction that allows non-recourse mortgages (and you signed onto one). Investment returns shouldn’t be directly compared to paying down a mortgage without also assessing the comparative risk to get those returns.
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# ? Nov 26, 2022 02:46 |
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The reduction in interest payments also a "tax free" return, so that should be factored in, too.
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# ? Nov 26, 2022 07:56 |
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Yeah that kind of rule of thumb thinking only applies when interest rates were basically zero and equity returns were thirty billion percent. You really need to consider your own risk tolerance and situation.
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# ? Nov 26, 2022 16:23 |
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With inflation going on I'm looking to put some of my savings into relatively safe investments, does anyone have any thoughts on: - inflation protected securities bonds/securities (I know the US has these, are there good equivalents in canada?) - buying bonds vs buying bond ETFs - with interest rates rising, are GICs and savings accounts offering interest worth a drat?
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# ? Dec 1, 2022 20:15 |
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mila kunis posted:With inflation going on I'm looking to put some of my savings into relatively safe investments, does anyone have any thoughts on: I'm not saving for anything specific in the next few years, so I'm sticking with a savings account. If I had something in mind, I'd be looking at relevant duration bonds or GICs. Bond funds don't strike me as safe short-term investments but I'm no expert. https://www.highinterestsavings.ca/chart/ rates have been going up all year. You'll never avoid inflation entirely but there's movement.
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# ? Dec 2, 2022 02:13 |
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Why must the banks be so exhausting to deal with. All I needed was to increase my daily transaction limit. But the bank won't allow me to do that because I opened my account in the central region and I'm currently living in the eastern region so they can't do poo poo. And transferring everything to the eastern region is impossible because they'd want me to open a new account. So now the only way to change things in my account is via phone calls or in-person bullshit and I'm about five hours away from the branch where I originally opened my account ten years ago. All this online banking poo poo and yet changing anything meaningful needs to be in person with obstinate and incompetent bank tellers.
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# ? Dec 2, 2022 16:28 |
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I'm with HSBC and RBC is going to buy them? Should I look for another bank or is RBC good?
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# ? Dec 2, 2022 16:58 |
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VelociBacon posted:I'm with HSBC and RBC is going to buy them? Should I look for another bank or is RBC good? I'm with RBC and see my above post about their tellers being exhausting to work with. Day to day online banking with them is fine but I'm still irritated over this morning.
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# ? Dec 2, 2022 17:06 |
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I think that the banks are all fundamentally similar but RBC has hosed me with fees in the past and ignorant tellers who don't know their own services costing me hours of time and tens of dollars of fees I have to work to get back. I like their mobile app....all the banks have decent apps and similar services though. Both times working with bmo I've had good customer service so far, including managers advocating for me to their corporate services branch (idk what it's actually called, but I hope you get an idea).
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# ? Dec 2, 2022 17:11 |
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mila kunis posted:With inflation going on I'm looking to put some of my savings into relatively safe investments, does anyone have any thoughts on: You can get GICs above 5% now or you can get canada treasury bills around 4% annualized if you want to do like 3 months at a time or something.
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# ? Dec 2, 2022 19:06 |
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mila kunis posted:- with interest rates rising, are GICs and savings accounts offering interest worth a drat? I'm getting instagram ads for Vancity GICs of less than a year for like 4%+
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# ? Dec 2, 2022 21:18 |
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RBC's mobile app is great. Their products however are trash and as mentioned above their tellers are incompetent idiots in almost and possibly every branch I've been into. I switched to HSBC a while ago and I'm pretty pissed that I'm going to have to switch to another bank soon. Speaking of, how good are each bank about upping e-transfer limits from the paltry $3k a day or whatever? Scotia seemed to have the right combination of accounts I wanted, but I phoned them up to ask about e-transfer limits and fobbed me off with "it depends" and wouldn't elaborate on what it depends on. TD I've heard will do it no problem, but I want to know if anyone has tried this at their bank at any point.
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# ? Dec 2, 2022 22:26 |
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A more detailed article about tax loss harvesting. As we're now in December, you only have a short while left to consider doing this to get losses applicable for the next tax season. quote:It’s tax-loss harvesting time again
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# ? Dec 3, 2022 02:44 |
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Funny enough while the bank tellers at the RBC here in Ottawa were completely useless, once I got on the phone with the branch in Guelph they were able to change my transaction rates in five minutes and four of those minutes were spent trying to tell me about online offers. So score one for Guelph RBC it seems.
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# ? Dec 3, 2022 17:49 |
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qhat posted:RBC's mobile app is great. Their products however are trash and as mentioned above their tellers are incompetent idiots in almost and possibly every branch I've been into. I switched to HSBC a while ago and I'm pretty pissed that I'm going to have to switch to another bank soon. Their app is a bit garbage too. You can turn on MFA for banking but if you go to RBC direct invest web login for the same account (you can immediately click into banking from direct invest), it just doesn't care about MFA at all. Called them about it and they're like whatever.
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# ? Dec 3, 2022 17:57 |
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Postess with the Mostest posted:Their app is a bit garbage too. You can turn on MFA for banking but if you go to RBC direct invest web login for the same account (you can immediately click into banking from direct invest), it just doesn't care about MFA at all. Called them about it and they're like whatever. I heard they brought in like actual software token 2fa for all logins recently? One of the main reasons for me switching to HSBC is because they were literally the only bank in Canada with good security measures, but that sounds trash if what you’re saying is right. Wouldn’t surprise me that DI fucks everything up because they are almost a different organization.
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# ? Dec 3, 2022 18:54 |
I also have only had lovely experiences with RBC, but tbh I imagine the experiences with all big 5s are going to be pretty similar and YMMV.
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# ? Dec 3, 2022 19:08 |
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qhat posted:I heard they brought in like actual software token 2fa for all logins recently? One of the main reasons for me switching to HSBC is because they were literally the only bank in Canada with good security measures, but that sounds trash if what you’re saying is right. Wouldn’t surprise me that DI fucks everything up because they are almost a different organization. It's definitely still like that. Do it all the time, whenever I forget my phone in the kitchen and too lazy to get up, I just go to direct invest login page instead. It's a little terrifying
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# ? Dec 3, 2022 23:06 |
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As interest rates keep spiralling higher and higher we are entering some interesting times where the last decade of personal finance advice articles are not necessarily worth following anymore. For years now there's been a lot of advice to load up your TFSA, then RRSP, then work on debt, since returns on the market could be expected to be better than the sub 3% interest rate on debt. At least this year this hasn't been the case! Maybe some people don't agree with that logic, but I definitely feel I've read it again and again during the last years of our super low interest rate environment. Just having a glance for an example and TD's HELOC interest rate is 5.95% and we can expect that to continue to creep up higher and higher. At this point should people with debt going so far to be emptying their TFSA to avoid paying ~6%+ on their debts? I think it could make sense. And then the newly debt free can start setting aside a bit of money from paycheques toward rebuilding that TFSA by adding new positions into a severely declined market.
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# ? Dec 4, 2022 06:56 |
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I mean, general advice is never a substitute for running the numbers on your actual situation. The usual advice I see (and would give) is something like: 1. Pay off expensive debt. 2. Save and invest via tax-advantaged accounts. 3. Invest via taxable account and/or pay off inexpensive debt, as preferred. I think that advice still applies? You left out step one, but I don't remember seeing advice to carry a credit card balance or take out payday loans to juice your TFSA. And finding one year of bad returns and increasing interest rates doesn't much matter on a scale of decades. Though you're entirely right to be wary of advice that assumes low or non-increasing interest rates. Or that stocks never have consecutive bad years. If you come across examples of personal finance advice that seemed good but now seems invalid, I'd be curious to see it. I'm sure it's out there but so far you're beating up a strawman. (Unless taking out a heloc to invest in stocks was common advice?)
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# ? Dec 4, 2022 09:07 |
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pokeyman posted:I mean, general advice is never a substitute for running the numbers on your actual situation. The usual advice I see (and would give) is something like: I remember reading articles about taking out a sub 3% line of credit to buy equities which you earn more than that in the short term. I think the main point here is there were lots of debts people classified as inexpensive when they were acquired (e.g.: loc at prime + 1.5) which are now comparatively expensive at 8+%. Now that the numbers have changed, lots of top advice articles need to be updated. New investors are going to either blindly follow them because that's what they've been linked, or be confused as to why their numbers aren't adding up the way the article's are.
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# ? Dec 4, 2022 16:28 |
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You're not wrong, but if you read advice that's "borrow at 3% to go earn 7%" and you're like "awesome idea", but then you look and borrowing rates are 8% while equities are an extremely uncertain 7% still, and you do it anyways... Well that's on you.
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# ? Dec 4, 2022 16:43 |
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Borrowing to invest is almost never a good idea, unless you are okay with losing all your money.
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# ? Dec 4, 2022 19:33 |
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I swear I was seeing these articles everywhere, but on a custom google search excluding 2022, which is surely not giving this advice this year I didn't find much from the Globe and Mail. Just this article from 2021 alluding to the fact that there def are some giving this advice, but dissuading people. Maybe the conservative Globe has never promoted this and it's always just been young FIRE bloggers or some poo poo, but I do think that even the Globe has suggested this in the past. They certainly have an article up as of October 26 reiterating what I said in my earlier post, that you should definitely NOT do this right now. It also alludes to there previously being a lot of advice that borrowing to invest was a good idea. quote:The smart money is saying no to borrowing against home equity My concern for casual investors is those with a "set and forget" mindset, perhaps in 2021 doing a maneuver like this and shutting their brain off and pretty much not looking too closely at their bank statements. They might not even realize yet that they're paying almost 6-7% in interest and no longer 4%.
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# ? Dec 4, 2022 19:48 |
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Some kudos to the Globe here for at the very least throwing up a little tag saying "um this is old fyi be wary" Femtosecond fucked around with this message at 19:58 on Dec 4, 2022 |
# ? Dec 4, 2022 19:51 |
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qhat posted:Borrowing to invest is almost never a good idea, unless you are okay with losing all your money. This goes for housing and not just equities, by the way. Some Canadians are about to get hands-on experience with this fact.
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# ? Dec 4, 2022 22:50 |
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tagesschau posted:This goes for housing and not just equities, by the way. Some Canadians are about to get hands-on experience with this fact. Same folks whining that the mortgage stress tests were unreasonable
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# ? Dec 4, 2022 22:58 |
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I'm trying to remember the argument some mortgage broker made to me about why the stress test was the cause of the housing crisis... Something like how it artificially forced everyone into the same "low price" product and there wasn't enough of it, so then the price went up? I forget it made no sense.
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# ? Dec 5, 2022 04:05 |
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Femtosecond posted:I swear I was seeing these articles everywhere, but on a custom google search excluding 2022, which is surely not giving this advice this year I didn't find much from the Globe and Mail. Just this article from 2021 alluding to the fact that there def are some giving this advice, but dissuading people. Maybe the conservative Globe has never promoted this and it's always just been young FIRE bloggers or some poo poo, but I do think that even the Globe has suggested this in the past. So the theory goes that in a world where interest rates are high, you should expect return on risky assets like equities to increase in line with the changing risk profile of the entire stockmarket. The only trouble is that in order for those returns to materialize, the price of equities has to fall in the short term to account for the fact there are less riskier assets that pay higher returns. The exact same stock that has roughly the same revenue and risk profile but significantly cheaper is going to give you those higher returns. At any rate, if you could legitimately just sit around and earn 15% on an interest rate of 7%, you should absolutely make that deal all day every day. The trouble is that people never get to that point because guess what, you still have to pay that interest every year regardless whether you saw any returns, and margin calls are a real thing that happens, so you better hope you didn't lose your job or anything. TLDR borrowing to invest is dumb, and should only be done if you are chill with losing 100% of your investments at any point.
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# ? Dec 5, 2022 06:11 |
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Hey CanGoons, I have a question for all of you good people who may be more knowledgeable than I with regards to TFSA rules. I've tried to look up the rules online and they seem to be intentionally open ended. I think this is to keep the door open for future management about what a qualified TFSA investment is, potentially in order to tax gains. Long story short, I'm youngish. Why not buy SPXL (NYSE Arca, designated exchange security) for 6+ month or multi-year holds with post tax money rather than in a deferred tax RSP. If I don't touch the money for over several months, I don't see any reason why it should be considered business income or long-term cap gains. However, everything I see online warns that the CRA has discretion in examining the type of trade and asking for taxes. Would a 3x leverage ETF following the SP500 end up getting flagged as business/cap-gain income without being sold? Would this put me at risk of being taxed later, defeating the purpose of the TFSA vehicle? Please don't talk to me about leverage ETF decay, I understand the risks. Thanks!
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# ? Dec 23, 2022 19:08 |
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The conventional wisdom I’ve absorbed is “don’t day-trade in your TFSA”, which I’ve taken to mean it’s the trading frequency and not what’s being traded. But as you point out it’s left intentionally open-ended so CRA has plenty of discretion. If I was making two trades a year I’d be pretty surprised to hear from CRA about it. I also feel confident I could talk my way out of a penalty if they were threatening one. But I’m not an expert and haven’t tried myself.
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# ? Dec 23, 2022 19:38 |
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Pretty sure I read that the CRA comes back to you and makes you prove that you're not doing trading in your TFSA as a "job" (as income derived from that is taxable) type of situation. Same kind of thing with people who were flipping houses and claiming them as their primary residence so they wouldn't pay any taxes on the sales.
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# ? Dec 23, 2022 20:06 |
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Nobody knows for sure since they don't publish hard and fast rules. But from what I've heard frequency is the biggest trigger for getting a letter from the CRA about what's going on in your TFSA. If I was trading the same security less than once a month, regardless of what it was, I would not be concerned. And from the various stories I've read, there's a lot of room above that before poo poo gets dicey.
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# ? Dec 23, 2022 21:19 |
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# ? Jun 8, 2024 08:02 |
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Four things: 1) if you're holding it a long time they don't consider it day trading. Just because it's a volatile investment vehicle doesn't upset them. I have a bit of leveraged ETF in an RRSP and in a TFSA. 2) the concern people have with leveraged ETFs in a TFSA is that you can only put so much into the TFSA. Because it's tax free, people generally want to put safer investments in their TFSA as you don't risk losing that $ room. For an example, if you bought a SPY put for $1000 that expired worthless, you've just lost $1000 of room in that account, forever. 3) leveraged, especially triple leveraged ETFs are not good for long term holding because they 'slip'. There's a lot of articles online about this but basically speaking, due to the management fees and the way they generate the leverage, you're actually exposed to a little more downside than upside. In choppy markets you especially take a hit. It's worth reading alot about this. 4) buying SPXL in a TFSA also means you're taking CAD and using it to buy USD shares. It's not the end of the world but SPXL isn't CAD hedged or anything. You're basically existing yourself to some currency fluctuations. It's not a huge deal but again worth doing the research.
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# ? Dec 24, 2022 09:18 |