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Maximizing your last paycheque


brelic

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39 minutes ago, King Knut said:

I don't want to lose SImmonds for nothing, but if we're going to move him, it should be for something we can use.  

If Simmonds resigns for like 6 for 4 years, I'll be happy for me and for the Flyers, but disappointed for him.  

 

I can understand the sentiment, but let's not pretend like living life with $24M in the bank is any kind of downgrade from what he's living now. At some point, you have enough money, and it is the agents looking to maximize salaries for both selfish (their own commission) and collective (driving up overall player salaries) reasons. 

 

Some players are the greedy type that really want that big paycheque, but I would venture that most NHL players are pretty reasonable and in the end, the difference between $24M, and $30M on their quality of life is negligible. 

 

Wayne Simmonds is a small town kid who managed to fulfill his dream and make millions of dollars doing it. If he takes any kind of "discount" it's because he's choosing to control his own destiny and play where he wants to be. And that's the best decision a person can make, period.

 

 

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49 minutes ago, brelic said:

 

I can understand the sentiment, but let's not pretend like living life with $24M in the bank is any kind of downgrade from what he's living now. At some point, you have enough money, and it is the agents looking to maximize salaries for both selfish (their own commission) and collective (driving up overall player salaries) reasons. 

 

Some players are the greedy type that really want that big paycheque, but I would venture that most NHL players are pretty reasonable and in the end, the difference between $24M, and $30M on their quality of life is negligible. 

 

Wayne Simmonds is a small town kid who managed to fulfill his dream and make millions of dollars doing it. If he takes any kind of "discount" it's because he's choosing to control his own destiny and play where he wants to be. And that's the best decision a person can make, period.

 

Wish I could agree with that, but I can't.  

 

He's Canadian, so that will make his life a little easier, but after paying US Income Tax, Canadian Income tax, union dues, his agent's cut, yadda yadda yadda what he earns in his next contract will essentially be for the rest of his life. 

 

He just got married, he'll probably be having kids soon.  I'm not going to begrudge him if he decides to make $36M

before he retires rather than $24-$28 million.  If I were his friend, I'd encourage him to do so.  

 

I think it's very easy to think of these guys as just rich and filthy rich and who cares, but for the chance to secure a solid, safe economic life for one's future and family?  No Brainer IMHO.  

 

Hell, if he's so altruistic, it would make a lot more sense for him to haul in the money and use it to set up charities and what not.  

 

As it is, with the cap and profit sharing and all the rest of it, if he doesn't earn the money, it's just staying with the owners or going to another player who probably won't earn it (like Bryz or someone).

 

Wayne should do what's best for Wayne.  

 

 

 

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23 minutes ago, King Knut said:

 

Wish I could agree with that, but I can't.  

 

He's Canadian, so that will make his life a little easier, but after paying US Income Tax, Canadian Income tax, union dues, his agent's cut, yadda yadda yadda what he earns in his next contract will essentially be for the rest of his life. 

 

Of course, it's not $24M in the bank after taxes. With a good accountant/money manager, you can maximize what you keep and make smart investments. 

 

And it's not for the rest of his life. Life doesn't stop at 35. Simmonds will almost certainly do something else with his time, and I'm sure he'll make money doing it. 

 

23 minutes ago, King Knut said:

 

He just got married, he'll probably be having kids soon.  I'm not going to begrudge him if he decides to make $36M

before he retires rather than $24-$28 million.  If I were his friend, I'd encourage him to do so.  

 

I think it's very easy to think of these guys as just rich and filthy rich and who cares, but for the chance to secure a solid, safe economic life for one's future and family?  No Brainer IMHO.  

 

By any measurable standard, they *are* rich. They are the top 5% earners. A friend of mine is looking at selling his company in the $50M range, and when all is said and done, he might end up with $12-15M (taxes, capital gains, partner shares, etc). Can that sustain a family of 4 for the next 25+ years? Absolutely. On the low end, it's $480,000/year tax-free. But he, just like professional players, are ambitious Type A personalities, and will find something else to do with their time and money.

 

23 minutes ago, King Knut said:

 

Hell, if he's so altruistic, it would make a lot more sense for him to haul in the money and use it to set up charities and what not.  

 

Lol, I said nothing at all about Simmonds being altruistic. 

 

23 minutes ago, King Knut said:

As it is, with the cap and profit sharing and all the rest of it, if he doesn't earn the money, it's just staying with the owners or going to another player who probably won't earn it (like Bryz or someone).

 

Wayne should do what's best for Wayne.  

 

Exactly, and that was my initial point. Whether or not the fans feel like he left money on the table, he will do what's right for him and his family.

 

Whether or not it's $24M or $50M, he will never have to worry about money.

 

PS - Why is it easier that he's Canadian? I thought we had income taxes that were quite a bit higher than the US.

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12 minutes ago, brelic said:

Whether or not it's $24M or $50M, he will never have to worry about money.

 

 

Keep an eye on your friend and let me know if that holds true.

 

12 minutes ago, brelic said:

Whether or not it's $24M or $50M, he will never have to worry about money.

 

PS - Why is it easier that he's Canadian? I thought we had income taxes that were quite a bit higher than the US.

 

It depends on where he lives obviously, but for US citizens, the largest portion of our incomes goes to housing, child care and medical expenses (of which a former hockey player is sure to have many).

 

They like to say that your taxes are higher, but in sheer percentages it's actually lower for top earners like Simmonds.  Add in that we can no longer deduct our property taxes and we're paying quite a bit more right now which is to say nothing of the medical expenses (for which most of us pay more than we do in income taxes).  I assume the players union will have quite an impact on his medical coverage post retirement, but I'm not familiar with how long that lasts post retirement or how it affects his wife/potential children and I'm fairly certain it won't cover his parents as they age (another booming cost for Americans).

 

Long story short, if I were a retired hockey player, unless I had a lucrative TV contract or coaching job, I'd probably rather retire in Canada.  

 

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7 minutes ago, King Knut said:

 

Keep an eye on your friend and let me know if that holds true.

 

I will. We've actually talked about quite a bit - he's my closest friend. There will definitely be tradeoffs if you decide to do zero money-making activities after you 'retire' or sell off - as in you may have to accept a lower standard of living. 

 

If you want to keep living the multi-millionaire lifestyle until you die, sure, you'll either have to maximize your last paycheque (like Simmonds could choose to do) or create another source of income. That is a LOT easier to do when you start with millions in the bank. 

 

My friend already knows deep inside that selling the company is not the end, but just a new beginning for his next venture. 

 

7 minutes ago, King Knut said:

 

It depends on where he lives obviously, but for US citizens, the largest portion of our incomes goes to housing, child care and medical expenses (of which a former hockey player is sure to have many).

 

They like to say that your taxes are higher, but in sheer percentages it's actually lower for top earners like Simmonds.  Add in that we can no longer deduct our property taxes and we're paying quite a bit more right now which is to say nothing of the medical expenses (for which most of us pay more than we do in income taxes).  I assume the players union will have quite an impact on his medical coverage post retirement, but I'm not familiar with how long that lasts post retirement or how it affects his wife/potential children and I'm fairly certain it won't cover his parents as they age (another booming cost for Americans).

 

Long story short, if I were a retired hockey player, unless I had a lucrative TV contract or coaching job, I'd probably rather retire in Canada.  

 

 

Ah, makes sense. Sounds like medical expenses take up a bulk of income in the US, which is kind of a shame truthfully. It's hard to fathom the richest country in the world commoditizing healthcare. That's a whole different debate though.

 

How much is child care?

 

You know what? I might just split this off to another thread.

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If I'm Wayne, I know I already sold myself short on this last contract.  Probably a little under  $10M over the course of this last contract (assuming a $5.5M/yr. would have been fair on the open market).  

 

He will be 7 weeks shy of  31 when this new contract starts.  So even a 4 year contract gets him to 35.

I don't see the Flyers doing more than that $6M, which is a pay increase of $1M from the last year on his current contract. I still think if he shows last year was simply injury-riddled, he easily gets $7M on the open market.  Maybe he gets more than that, but honestly, given his age and the way he plays the game, I think that's foolish.  Someone will pay it, though.   And you may see someone give him the 5th or 6th year.  Again, I think that's foolish.

 

If it's 4 yr. vs. 4 yr. and it's only $1M/yr. difference, maybe he decides to stay where he's comfortable and his team is finally ready to put on a show.   If he does stay at $6M, he's down $14M (total) from what he arguably should have earned.    Over the 10 years on the Flyers, he would have made $48M vs. the $61M he could have elsewhere.

 

If other teams are adding a 5th or 6th year, the gap only widens.

 

He probably doesn't make anything in year 5 or 6 if he signs first with the Flyers for only four.   So, that's another $14M he's left on the table in those potentially two extra years.   He sits at $48M versus $75M over the course of his giving the Flyers a break.  

 

Yeah, I know $48M is still a lot of money.   But if anyone here is saying they'd take the $48M and be done at 35 years old (I don't care what he does next; he's not making that amount) or $75M and done at 37, I'm questioning their honesty.

 

I hope he's dumb and stays for the lesser amount in my selfish moments.  But for his sake, I hope he really thinks it through.

 

 

 

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8 hours ago, ruxpin said:

Yeah, I know $48M is still a lot of money.   But if anyone here is saying they'd take the $48M and be done at 35 years old (I don't care what he does next; he's not making that amount) or $75M and done at 37, I'm questioning their honesty.

 

I'm sure some people would honestly be ok with that. It's not just money - there are a lot of factors. How your body feels, do you still have the passion?, is the team any good?, what about my kids?, my wife?, my family?, do I have an opportunity to do something else that is equally intriguing?, etc. 

 

Again, my only argument was that at that level of money, any surplus becomes kind of negligible. If you compare retiring on $5M vs. $25, yes, there is absolutely a huge gap. But when it's $48M vs $75M, I don't think the lifestyle gap is significant. 

 

Let's assume half is lost to taxes, and you're looking at sustaining a family for 25 years (brings him to 60). That gives you enough time to make investments to fund the next 25, should you be so lucky.

 

Annual tax free 'salary' for 25 years.

 

$5M ($2.5M) - $100,000 

$25M ($12.5M) - $500,000

 

$48M ($24M) - $960,000

$75M ($37.5M) - $1,500,000

 

So the gap between the first two is much more significant in terms of lifestyle than the gap between the second pair. 

 

Of course, the one false assumption we make is that he retires with all this money in the bank, when in truth, he could be living at or above his means and only retire with his last year's paycheque because he blew the rest of it on whatever. So, yeah. 

 

A friend of mine said that was a huge reality check when he played for the Sens - the lower end salary players were kind of expected (or felt they were) to keep up with the likes of Alfredsson, Spezza, etc. A $10,000 night to my friend meant a LOT more than the same to Spezza. He made roughly $7M over 7 seasons.

 

Another former NHLer lives not far from my house, and he made about $23.5M over 11 seasons (from what I can see on capfriendly), and he lives in a modest upper tier home. 

 

If you choose to live at or above your means (without forward-looking plans), you'll struggle no matter how much money you make.

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9 minutes ago, brelic said:

 

I'm sure some people would honestly be ok with that. It's not just money - there are a lot of factors. How your body feels, do you still have the passion?, is the team any good?, what about my kids?, my wife?, my family?, do I have an opportunity to do something else that is equally intriguing?, etc. 

 

Again, my only argument was that at that level of money, any surplus becomes kind of negligible. If you compare retiring on $5M vs. $25, yes, there is absolutely a huge gap. But when it's $48M vs $75M, I don't think the lifestyle gap is significant. 

 

Let's assume half is lost to taxes, and you're looking at sustaining a family for 25 years (brings him to 60). That gives you enough time to make investments to fund the next 25, should you be so lucky.

 

Annual tax free 'salary' for 25 years.

 

$5M ($2.5M) - $100,000 

$25M ($12.5M) - $500,000

 

$48M ($24M) - $960,000

$75M ($37.5M) - $1,500,000

 

So the gap between the first two is much more significant in terms of lifestyle than the gap between the second pair. 

 

Of course, the one false assumption we make is that he retires with all this money in the bank, when in truth, he could be living at or above his means and only retire with his last year's paycheque because he blew the rest of it on whatever. So, yeah. 

 

A friend of mine said that was a huge reality check when he played for the Sens - the lower end salary players were kind of expected (or felt they were) to keep up with the likes of Alfredsson, Spezza, etc. A $10,000 night to my friend meant a LOT more than the same to Spezza. He made roughly $7M over 7 seasons.

 

Another former NHLer lives not far from my house, and he made about $23.5M over 11 seasons (from what I can see on capfriendly), and he lives in a modest upper tier home. 

 

If you choose to live at or above your means (without forward-looking plans), you'll struggle no matter how much money you make.

 

Or maybe he wants enough to make sure family is taken care of.  Whether it's parents or siblings or children (which he has no idea yet how many that will be) or to take care of some church or charity in his home town, etc.    I don't know.  I think we're talking about a huge sum that he's leaving on the table and I don't think the difference is negligible.  I guess I hope he thinks so.

 

The other difference -- and quite possibly more important for Simmonds, I don't know -- is that signing a 4 year deal with the Flyers probably ends his career 1-2 years younger than he otherwise might if  he signs 5-6 elsewhere.  I don't know his mind, but he appears to enjoy playing.  Who knows in 5 years?  Maybe the way he plays he starts suffering a lot of injuries and ending at 35 is freedom from that.  Or perhaps playing is just in  him and walking away because a 35-year old finding a contract in the NHL isnt't easy will stink.  

 

I really don't know.  Just throwing stuff out there. 

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1 minute ago, ruxpin said:

 

Or maybe he wants enough to make sure family is taken care of.  Whether it's parents or siblings or children (which he has no idea yet how many that will be) or to take care of some church or charity in his home town, etc.    I don't know.  I think we're talking about a huge sum that he's leaving on the table and I don't think the difference is negligible.  I guess I hope he thinks so.

 

Of course, I agree. We don't know what his intentions or motivations are. 

 

He could always follow in the footsteps of Walter White ;)

 

Which reminds me... Better Call Saul starts up in a few weeks!

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6 minutes ago, ruxpin said:

@brelic

 

Sorry, I was editing to add when you reacted to the original post.  Just added about the years/desire to play thing.

 

Also, there is an NHL defined benefits pension plan that was part of the last CBA. Apparently, they can receive up to $255,000 / year from age 62 onwards. Can't find more specific details though. 

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1 minute ago, brelic said:

 

Also, there is an NHL defined benefits pension plan that was part of the last CBA. Apparently, they can receive up to $255,000 / year from age 62 onwards. Can't find more specific details though. 

 

Wow.  I didn't know that.  That's...wow.

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2 hours ago, brelic said:

 

https://www.sportsbusinessdaily.com/Daily/Issues/2013/06/07/Leagues-and-Governing-Bodies/NHL-Pension.aspx

 

The NHL agreed to contribute $38M annually towards that plan for the next 10 years. 

I remember reading that but I thought the player had to play at least 400 games to qualify, I might be wrong. I believe Hextall has an amount in mind when it comes to resigning Simmonds. Once that contract is presented to Simmonds, it will be up to him whether to sign it or look elsewhere. I think Hextall will try to resign Simmonds to a 4 year deal if possible, I don't see him going more years than that.

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I love Simmer and would love to see him retire a Flyer *BUT* Simmer needs to do what is best for him and his family.  He was pretty well underpaid during the term of his current contract.  I will not fault the guy whatsoever if he tries and gets his big payday as it will most likely be he last contract.  

 

The guy brings the intangibles and is a Flyer in the truest sense.  There are so many factors that will go into this contract negotiation that none of us understand.  Will he take a hometown discount to stay on an up and coming team?  Does he want a payday?  Will he consider a short term deal?  It is all conjecture and I am sure Hextall has a price point at which he is comfortable in extending Simmer.   

 

In the end it is simple - the Flyers can ill-afford to overpay Simmer and give him a long term deal.  I love the guy but the way the roster is shaping up he is a third liner (which is not a bad thing considering the depth of the top two lines).  He is recently married and probably on the last stretch of years in the league.

 

In the end Simmer needs to do what is best for him and his family.  Simple as that...  Hextall needs to either pony up or try and get him to sign a shorter term.  Otherwise, I see no other options and he will be traded for the best return.   I have read where some people fear his value has dropped a bit but I still think you could get a very good return.  

 

I want him in the O&B but at a team friendly deal which I am not sure is in the cards.   He has an opportunity to get his well deserved payday and if he does good for him... If he takes a team friendly deal to remain with the Flyers even better.   

 

My money is on him looking for a payday...

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14 minutes ago, murraycraven said:

I love the guy but the way the roster is shaping up he is a third liner (which is not a bad thing considering the depth of the top two lines). 

 

A 3rd liner who is likely to get PP1 or PP2 time, where he has shown the most value over his career. Maybe 3rd line minutes keeps him fresher for the powerplay, who knows?

 

 

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2 minutes ago, brelic said:

 

A 3rd liner who is likely to get PP1 or PP2 time, where he has shown the most value over his career. Maybe 3rd line minutes keeps him fresher for the powerplay, who knows?

 

 

 

possibly and it is a good point but I am not going to overpay based on the PP since I know JvR and NP can take over that role.

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I wonder how integrated into the community Wayne is ? i don't mean that in a racial sense but in a does he think "man I really like living in Philadelphia". Does he have home in Canada that as soon as the season's over he hightales it to ? Would he rather be fishing on Lake Okanagan ?.... If his "life" is in Philadelphia it could factor into the negotiations.

 

I like Simmer, he's one of my favorite Flyers. I would not begrudge him snagging a giant payday on the open market. I won't boo him when he comes back to town. He's a class act, who's worked hard and deserves the spoils of his achievements.  If he wants to stay here, all the better for us. 

 

A point of discussion could be the salary cap sucks for this very reason. 

Simmond's is a guy that took a bit of a hometown discount because he liked his situation. He outperformed his contract for several years. Now, the team could have the opportunity to reward that loyalty and output with a proper raise and a term that keeps this guy on the team until he's done playing. Except for the team to do that, it will hinder its ability to compete for championships.

There's something not cool about that, I really think the next cba needs to examine ways to keep cornerstone guys and guys a team develops without crippling it's ability to compete.  I really think the NBA's structure would be helpful for the league. 

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On 7/23/2018 at 3:06 PM, brelic said:

 

I will. We've actually talked about quite a bit - he's my closest friend. There will definitely be tradeoffs if you decide to do zero money-making activities after you 'retire' or sell off - as in you may have to accept a lower standard of living. 

 

If you want to keep living the multi-millionaire lifestyle until you die, sure, you'll either have to maximize your last paycheque (like Simmonds could choose to do) or create another source of income. That is a LOT easier to do when you start with millions in the bank. 

 

My friend already knows deep inside that selling the company is not the end, but just a new beginning for his next venture. 

 

 

Ah, makes sense. Sounds like medical expenses take up a bulk of income in the US, which is kind of a shame truthfully. It's hard to fathom the richest country in the world commoditizing healthcare. That's a whole different debate though.

 

How much is child care?

 

You know what? I might just split this off to another thread.

 

 

Child care is a rising cost that has risen between 75-100% (adjusted for inflation) over the past generation.

 

Depending on where you live it can cost an average of $5000-$16000 / year.  That's average. Obviously if you're going to have a Nanny, etc whatever it costs more.  Clearly child care isn't an expense forever, but depending on how many kids you have, that's a good chunk of change for a while. 

 

I've got two kids in day care right now and each one costs more per year than tuition plus room and board for college did my freshman year. 

 

Those costs are rising  dramatically (two to three times the fate of inflation at State University level) as well.  

 

Healthcare costs have also risen at 2 to 3 times the rate of inflation.  

 

Essentially, living in a modest house, without trying, those three basic things can easily take $100k.

If someone gets really sick or needs surgery or something else, things obviously get more complicated.  Some insurers have an "out of pocket maximum" so if you get Cancer or need heart surgery or something, you're only paying $6k or $10k or whatever, not the full $300k such things can cost.  But this is far from universal.  Most insurers just cover percentages of such treatment.  

 

Keep in mind, NHL players take home between 30%-40% of their actual salaries.  So going with the higher end, if Simmonds make $24Million over the next 4 years, he's actually taking home just under $10Million.  5-10% of which will go to his agent. 

 

So we're talking about whatever he's saved so far plus $9million to retire on.  

 

It's not like it's chump change, but it's not really the kind of Big time no worries ever again kind of money a lot of us like to think it is.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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11 hours ago, LegionOfDoom said:

It would be great if they gave Simmer a 2 + 5 year deal. (First two year deal 7+ mill, then resign him @ 3+/4+/or 5+ mill "depending how he performs" for 5 years to retire a Flyer)

 

That would be about a $5.3 million cap hit for a 5 year deal.  I'd be very comfortable with that, but I think Wayne could get more and if I were his friend, I'd encourage him to try.  

 

The Oshie deal is absurd and I'm not sure what the hell the caps were thinking, but hey... they won a cup so do they care?

 

You can't front load deals anymore, but if he even signed a 7 year deal with the Flyers with a cap hit of around 5, I'd be very comfortable with that, though I think it's likely he could get a better offer out there like maybe 6 for 7.  

 

 

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17 hours ago, Jam1986 said:

No more then 3yrs. No more than 6 mil. Great team guy but and anything over that bye-bye. What player in league can get cheaper and younger who is almost like him.

 

It's not that I disagree with your conclusion (though I'd go for 5 probably), but I do feel obligated to point out that Wayne is pretty much universally agreed upon to be the best power forward in the NHL over the past few seasons.  Meaning you literally can't get anyone younger and cheaper who does what he does.  

 

Questioning how much longer he'll be able to do it (especially after last year's injury ridden season) or how valuable that role is at this point are valid questions and worth discussing... but let's not pretend that it will be easy to replace him.  They'd have to change their approach on the PP (and the kinda already started to at the end of last season without it hurting much).  

 

The question is, if he's healthy for real, can a healthy Wayne, added to the experience that Patrick got last year added to what JVR will now bring make BOTH power play units significantly better?  It's a no brainer that the can and should.  Hopefully it plays out like that.

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I expect Hexy will have a long talk with him at some point early in the season. Either he signs on a hometown discount for 4-5 years max, or I imagine he'll be traded. I can't tell you what Simmonds will agree to of course. It's an individual choice. He can definitely get more money and term elsewhere. 

 

Fact is, he just doesn't fit the plans in Philly anymore. It's no knock on his ability, which is still very high caliber, it's just that we now have others who are younger and stand to take up his minutes this year and moving forward. He should be a top six RW, just not on this team. He should be a top PP net front guy, but he won't be on this team. On many other teams, he's worth 7 million. Someone will give him that much if he hits the market. I think if he insists on getting that here, Hex will move him.

 

He may get showcased to start the season though. I could see him getting top six minutes out the gate.

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