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Speaker 1: You know, it does make a difference if you can

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only get forty percent return compared to one hundred or

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even eighty percent. So I definitely think it impacts decisions,

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and I don't think it necessarily hurts.

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Speaker 2: You're listening to Carrie Leutz's Financial Survival Network, where you

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get valuable information you just can't find anywhere else to

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thrive in today's trying times. You need the Financial Survival

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Network now more than ever. Go to Financial Survivalnetwork dot

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com and get your free newsletter and gift. Financial Survival

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Network now more than ever.

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Speaker 3: And welcome.

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Speaker 4: You are listening to and watching the Financial Survival Network.

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I'm your host, Carrie Lutz. Well, we're almost at the

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end of March, and do you know what comes after March?

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Speaker 3: April? And do you know what comes smack dab in

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the middle of April.

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Speaker 4: Yes, you'd like to forget it, just like I would always,

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But we're talking about tax time and well, as you know,

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there's a lot of pitfalls, a lot of complications, a

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lot of things that you need to be thinking about

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here and my next guest can help you. And Gannon

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CPA and does a lot of advising and tax prep

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for real estate investors, short, long term, any kind you

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can think of.

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Speaker 3: And it's great to have you on the show.

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Speaker 1: Yes, thank you so much for having me. You're gready

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to be here.

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Speaker 3: Great.

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Speaker 4: So, taxes and real estate, what's the what's the biggest

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mistake that real estate investors make concerning their taxes?

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Speaker 1: So, I think it's treating it, you know, as it

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were an asset costs, like really tracking it. I think

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the key with real estate investing, like anything else, is

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you have to get the rules, and you know, on

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the tax side, they are different depending on what you're

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investing in and how you're arresting in that. So I

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think you know what we were we start with a

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lot of our clients is just to make sure they

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understand the rules. My goal, you know, whether it's with

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business owners or relative investors, is just to give them

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back control, right Like you shouldn't have to wait for

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me to give you all the rules. But if I

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can educate you other rules of the game, then you're

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able to make better investment decisions. So you know, that's

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really my own Mmm.

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Speaker 4: So what do you think the biggest mistake though that

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they're making that's costing them money?

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Speaker 1: I mean I would say probably just paying attention to

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how it's getting reported on your taxture. I think a

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lot of for a long time, real estate would just

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sort of one of these things that no one really

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knew where it was, or if they did, if I'm

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a aguline or really looks at it. But I think

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then you go for a loan or you go to

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buy other property, and then you're asked all these questions,

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and especially when you look at the categorization. So many

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times I've seen people get hung up, whether it's do

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a lender trying to buy another property because you know,

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their improvement on the property was put in as repairs

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and they just didn't you know, GPA didn't really care,

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wasn't told or it was just checked that way, and

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there's a huge difference between you know, capital improvement and repair.

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A lot of times all those analysis things that are done,

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you know it makes difference. But they just be paying

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attention to how it's getting reported and making sure that's

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the right story.

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Speaker 3: So how do you stop them from making that.

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Speaker 1: Mistake to not get into the busy season approach? So Michael,

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with our clients is to really make sure that we're

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paying attention throughout the year that were looking for the

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end of the year, you know, so when we get

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to this year's return, we don't have any surprises. But

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I think, as the owner, don't be afraid to ask

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your repair of questions. I had a guyantane with just

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this year and he couldn't get a mortgage on a

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second property because someone put the new bathroom in as

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a twenty grand repair, and lenders, if there's a repair,

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they think that every year. They think, oh if I

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had twenty thousand last year to eight thousand next year,

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they don't know. So you don't have to fuck right

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looking at you know, that's an improvement you invested in

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the property, So ask the questions if you're not sure

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what those warms look like.

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Speaker 4: From a tex standpoint. So some things you can write

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off right away, other things you have to do it

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over a period of years, right right, right.

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Speaker 1: And it were not in one hundred percent bonus appreciation,

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So yes, there could be a different in the return,

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but in his return there wasn't. It didn't really matter

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because he couldn't take advantage of the loss anyway. So again,

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I think having that discussion before the return. It filed

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you know makes a.

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Speaker 4: Different Okay, yeah, so about that, the bonus depreciation and

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all that. What you're thinking as far as where where

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the tax situation is going to be, I.

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Speaker 1: Mean, I think nobody knows. A lot of what I've

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read is just that mid summer there should be an answer.

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I think the thought is that, you know, the hope

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is that one hundred percent comes back. I mean, otherwise

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we're in a forty percent bonus, which is not very

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beneficial to most people doing projects. You know, were last

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year was sixty. Before that I was eighty. I think

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the thought is that this year they have to do

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something out a lot of these rules. I think the

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other thing that's up at the end of this year

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would be to qualify business deduction with anyone who to

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pass through that could go away. So I think there's

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a lot that's on the table for this year, and

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you know, hopefully by the middle of the year we

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have an answer.

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Speaker 3: Got it all right?

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Speaker 4: So let me ask you a question about the bonus

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appreciation and all that good stuff.

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Speaker 3: How big a deal was that.

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Speaker 4: For the real estate community and what do you think

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the effects of providing it were.

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Speaker 1: I think it's a huge benefit. I mean, I think

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even you can see the difference between being in a

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forty sixty or sixty forty that it does impact decisions.

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And you know, I think from attack standpoint, you're really

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it's the same pie. If you have one hundred thousand

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dollars asset or a million dollar asset, You're going to

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appreciate it over the life of the asset, so it's

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really the same piece. But if you're able to give

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people more at the beginning, it does really match to

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the cash outflow, so you are incentivizing people to reinvest.

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So I think it is part of the decision maker.

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A lot of our investor clients, you know, real estate

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investor clients, larger construction clients have said that they're kind

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of waiting because you know, it does make a difference

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if you can only get forty percent return, compare it

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to the hundred or even eighty percent. So I definitely

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think it impacts decisions, and I don't think it necessarily

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hurts the tax picture because they will get less than

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future years. Right, you're going to pay more attack than

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future years because you're paid last this year.

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Speaker 4: So a lot of your clients doing we're doing cost

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segregation studies.

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Speaker 1: Definitely more now that they were in the you know,

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six forty sixty split only, And it's really for people

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who are in the short term rental state because they

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are useful like this thirty nine years, whereas residential is

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twenty seven and a half. So you know, that's a

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huge swing to go from year one GIU thirty nine.

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So yes, I definitely think that it has puced more

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people to know what cost varations are where when you're

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a one hundred percent doesn't really matter.

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Speaker 4: So if you're doing short term rentals, you can no

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longer you can't depreciate it like it was a residential

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real estate. Then did I get that right?

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Speaker 1: Yeah, that's one of the rules that people need to

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really make sure. I understand that the short term rental

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is treated as more as in a business category, and

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so it's not a residential. It's not considered a residential

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for the property for the useful life. Yeah.

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Speaker 3: Interesting, So yeah, which I did know that at one point.

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Speaker 4: So you're like airbnbs and all that stuff our investment

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real estate, they're not considered residential.

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Speaker 1: But on the flip side, they go against ordinary income

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in a lot of cases if you hit before criteria

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that the IRS says for being a bit rate it

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can offset ordinary income where a lot of real estate

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is considered passive and.

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Speaker 3: Not of right, that's fascinating, all right, all right?

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Speaker 4: So do you have like a checklist or something that

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you give your clients?

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Speaker 3: Yes? Would you be willing to send that out of people?

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Speaker 1: Definitely? Yes, I will, I will send well.

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Speaker 3: Good. So when we do this, then hey, appreciate you

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coming on.

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Speaker 4: And and why don't you give us your email address?

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Tell us your website so people, you'll send your free checklist,

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which will be real helpful to you because you should

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always have a checklist when you're doing taxes. So your

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email address app.

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Speaker 1: Yet it's again and at the largogroup dot com.

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Speaker 3: Okay, and the website's Largo Group dot com dot com. Yeah, excellent.

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Speaker 4: All right, Now, if you got a question, you can

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always send me an email Klatcarrielets dot com. We'll have

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a link to and site to the Largo Group in

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the show notes to this interview on Financial Survival Network

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dot com. Just go there, click it take you right there.

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And what we ask is when you're on the site,

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please sign up for our free newsletter like over seventy

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five thousand of you have done yet. That's right, we're

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up to seventy five thousand and thanks for coming by.

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Talk to you again soon.

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Speaker 2: Thank you so much, Thank you, thanks for listening to

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Carrie Lets's Financial Survival Network, your solution to today's trying times.

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For the latest, go to Financial Survivalnetwork dot com. Financial

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