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Author: dsemmler Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5068  
Subject: Books Date: 5/21/2004 1:34 AM
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The recent thread on _The Joy of Not Working_ got me interested in looking for a book(s) to pick up for my vacation starting tomorrow. So this afternoon I picked up a copy of _The Four Pillars of Investing_ and _Rich Dad, Poor Dad_.

I have heard nothing but good things about 4 Pillars and have not had the chance to read it as of yet. I figured there is no time like the present to get my hands on that book and give it a good read.

I had heard some good things about Rich Dad, Poor Dad so figured I would give that one a look as well.

I welcome any comments/opinions on these two books. I am making an effort to spend a little more time reading and these were my first two options.

dt
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Author: michaelangela Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2394 of 5068
Subject: Re: Books Date: 5/21/2004 7:48 AM
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'Rich Dad, Poor Dad' comes in for a lot of criticism because of the author's questionable past. However, it exhibits some important fundamental principles about the financial differences between employees and the self-employed that are essentially irrefutable.

Just treat the story elements as allegory, follow the underlying themes, and you'll get some good things out of it.

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Author: nmckay Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2407 of 5068
Subject: Re: Books Date: 5/21/2004 11:39 AM
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RDPD is a nice read, but there isn't a single concrete example or basic formula in the book. I don't think I recall seeing a number other than the page numbers.

It could have been a very good book had the author bothered to show some tables and statistics to back up what he was talking about. A few examples and a proforma or two would have gone a long way. I suppose that's why you go to the expensive seminars.

nmckay
there are two kinds of people, those who try to put everyone into two groups and those who don't.

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Author: TMFDj111 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2410 of 5068
Subject: Re: Books Date: 5/21/2004 1:04 PM
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The recent thread on _The Joy of Not Working_ got me interested in looking for a book(s) to pick up for my vacation starting tomorrow.

TMF has an Investing Books folder:
http://boards.fool.com/Boards.asp?fid=10099

You might be interested in the Rich Dad Poor Dad discussion board:
http://boards.fool.com/Messages.asp?bid=116647

David Jacobs
TMFDj111

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Author: warrl Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2411 of 5068
Subject: Re: Books Date: 5/21/2004 1:05 PM
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What I've heard of Rich Dad, Poor Dad is that there's nothing solid about the book or any of its sequels - not even the existence of "Rich Dad".

Check out this commentary: http://www.johntreed.com/Kiyosaki.html

(The author of that critique is also an author of books on real estate investing. And reviews and critiques the work of other such authors - honestly. http://www.johntreed.com/Reedgururating.html )

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Author: TheBreeze Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2443 of 5068
Subject: Re: Books Date: 5/25/2004 7:14 AM
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I liked "Rich Dad Poor Dad" because it had some ideas I'd never thought of. I don't agree with much of the book--partly because of personal preference. (I don't want to "work for myself" in real estate or own rental property right now.) Most books that I've liked put numbers on stuff you already have a vague idea about--like, you already know that historically investing in a mix of stocks and bonds beats most other passive investments, but a book might put numbers on how you mix US large cap stocks, US small cap stocks, foreign stocks, I-bonds/US T-bonds and corporate bonds to maximize return while limiting risk, etc. However, RDPD had some eye opening ideas. I don't know how much I swallow, but it's an interesting exercize to have to think about that stuff, and look for evidence that either supports or refutes it.

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Author: dsemmler Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2484 of 5068
Subject: Re: Books Date: 6/1/2004 11:29 PM
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Thank you to all for the feedback on RDPD.

I am back from vacation and had opted to start with RDPD over Thhe 4 Pillars, mostly due to the shorter length as I figured I would get through the whole book while on vacation while still enjoying vacation.

I found the book somewhat entertaining as he told of ancedotes of encounters/sessions with RD. But as others have said, I really found the lack of details to be annoying. He often mentioned how easy it was to become rich and only requires basic math skills, but he never really gives any hard numbers to support that.

Given that I was not really looking to restructure my current investment plans, I enjoyed the book. Had I read this with the hopes of learning how to get started and get on the road to FIRE, I would have been disappointed.

warrl, thank you for the links to the critique by John Reed. I found that to be quite interesting to read after finishing the book. All in all, I enjoyed the book but only because my expectations were not extremely high.

I have started T4P but am not far enough in to really warrant an opinion.

Thanks again for the feedback.

dt

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Author: cyberisme Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2486 of 5068
Subject: Re: Books Date: 6/3/2004 8:31 AM
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What I got out of RDPD is to create an income stream through whatever means (but not trading hours for dollars) - such as real estate investments (rentals, etc), dividends on stocks, etc.

While we are investing a strong % of our gross income into our retirement accounts, we are also buying up rental properties (multi-family) creating a monthly income flow equal to the amount we want. This allows us to retire earlier, with an ever increasing income flow, and have retirement accounts for additional funds.

We expect this endeavor to fully fund our retirement within 10 years of our first purchase. This allows us to leverage our money now, creating greater wealth later.

C.

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Author: cyberisme Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2487 of 5068
Subject: Re: Books Date: 6/3/2004 8:38 AM
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It also (IMHO) explained that you have to accept the fact that everything has some level of risk. The rewards are greater, the higher the risk. Many wealthy people failed numerous times before "making it" - one example is Mr. Hershey, you know, Hershey's Chocolate??? He failed both in NYC and Philadelphia before "making it" in Hershey, PA.

Same with Thomas Edison. He failed 10,000 times before "making it" on the 10,0001 (light bulb).

That's one major point in the book. People are complacent and would rather just accept money in exchange for hours. Problem with that is that you can only go so far. With your own business, there is lots of work, lots of risk, and lots of reward.

Failure begates success.

C.

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Author: dsemmler Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2488 of 5068
Subject: Re: Books Date: 6/3/2004 12:41 PM
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cyberisme,

It also (IMHO) explained that you have to accept the fact that everything has some level of risk. The rewards are greater, the higher the risk. Many wealthy people failed numerous times before "making it" - one example is Mr. Hershey, you know, Hershey's Chocolate??? He failed both in NYC and Philadelphia before "making it" in Hershey, PA.

Funny that you mention Hershey as that is where we spent our vacation and where I read RDPD.

For me, the book did raise my interest in the possibility of using real estate as a means of increasing my cashflow. However, at the present time I do not know enough about the real estate industry and am in a learning process.

How familiar were you with real estate before beginning your process? Are you only investing in properties in your area or all around? If I am not mistaken, I thought you had packed up in an RV and were traveling around the country. Are you scouting out properties in different areas? Or do I have you confused with someone else?

Are there any boards here at the Fool about investing in real estate? At this point I am like a sponge and am trying to soak in as much as I can to make an informed decision on whether or not the risks are prudent for me.

dt

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Author: cyberisme Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2489 of 5068
Subject: Re: Books Date: 6/3/2004 3:29 PM
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Funny that you mention Hershey as that is where we spent our vacation and where I read RDPD.

When were you at Hershey? My parents are visiting and we took them out there on Saturday - dad, especially, loved it.

For me, the book did raise my interest in the possibility of using real estate as a means of increasing my cashflow. However, at the present time I do not know enough about the real estate industry and am in a learning process.

How familiar were you with real estate before beginning your process? Are you only investing in properties in your area or all around? If I am not mistaken, I thought you had packed up in an RV and were traveling around the country. Are you scouting out properties in different areas? Or do I have you confused with someone else?


Very familiar - caveat - my father is a real estate developer/realtor/etc and my family owns a large development, investment and management company in the area of the country I moved from almost 2 years ago. We are working towards our dream of full-time RVing (not doing it yet). We are investing in properties under the umbrella of my father's company in WA, ID and OR, not here in PA.

But, my father started investing with very limited knowledge - they bought, fixed up, sold at a profit. Then they began buying to rent out. SeattlePioneer began with little knowledge, etc. There are plenty of books on it and one can certainly start small.

Are there any boards here at the Fool about investing in real estate? At this point I am like a sponge and am trying to soak in as much as I can to make an informed decision on whether or not the risks are prudent for me.


That I don't know, I've really limited the boards I read here on the Fool, simply not enough time.

I would suggest reading a few books (browse through amazon) specifically catered to "first time landlord" or "being a landlord" etc. Don't worry about the "zero down" or "other people's money" books. First decide if you even want to be a landlord.

Then, try it. The only thing you can do is try. We had 3 rentals in which we were the direct landlord - HATED IT. HATED IT. HATED IT. Now, we don't have to do a thing as we hired a management company, LOVE IT LOVE IT LOVE IT.

Business is literally falling off trees right now under the "investment" realm. Meaning, there are more investors/buyers than properties and there are waiting lists for properties. It's incredible.

If you are interested in more information, please feel free to email me privately and I will point you in a specific direction where you can at least ask questions and get some answers.

C.

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Author: FriedaChopsticks Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2490 of 5068
Subject: Re: Books Date: 6/3/2004 4:11 PM
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Are there any boards here at the Fool about investing in real estate?

There definitely are. Here's one I lurk at: Owning Rental Property. I have found it very insightful.

http://boards.fool.com/Messages.asp?mid=20851497&bid=114196

Here's one on Real Estate Investing. I don't follow it as much. These folks seem much further along in the process.

http://boards.fool.com/Messages.asp?bid=113590

Hope this helps,
FriedaChopsticks

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Author: Hyperborea Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2491 of 5068
Subject: Re: Books Date: 6/3/2004 5:07 PM
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Business is literally falling off trees right now under the "investment" realm. Meaning, there are more investors/buyers than properties and there are waiting lists for properties. It's incredible.

That should be a warning sign that it is a bad time to be a buyer getting into the rental real estate business. With far more demand than supply prices will be driven beyond "reasonable" value. From what you say it might be a good time to be selling and getting out of the market.

Hyperborea

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Author: Hyperborea Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2492 of 5068
Subject: Re: Books Date: 6/3/2004 5:16 PM
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Many wealthy people failed numerous times before "making it"

The same is true for many poor people too. They failed numerous times but never "made it". Trying again after failure is a necessary condition for success but it is not sufficient.

People are complacent and would rather just accept money in exchange for hours. Problem with that is that you can only go so far. With your own business, there is lots of work, lots of risk, and lots of reward.

"With your own business there is lots of work, lots of risk, and" possibilities of "lots of reward."

It is no sure thing and many fail and despite trying again (and again ...) continue to fail. "Accepting money in exchange for hours" while not having the same open ended potential as running your own business seems to have the greater expected return.

Hyperborea

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Author: dsemmler Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2493 of 5068
Subject: Re: Books Date: 6/3/2004 7:49 PM
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cyberisme,

***When were you at Hershey? My parents are visiting and we took them out there on Saturday - dad, especially, loved it.***

We left on Sunday, the 30th and had been there a little over a week. We visited a few different areas in the vicinity but stayed in Hershey the whole time. We loved it and the area! More detail on my vacation can be found here if interested,

http://boards.fool.com/Message.asp?mid=20843217

***But, my father started investing with very limited knowledge - they bought, fixed up, sold at a profit. Then they began buying to rent out. SeattlePioneer began with little knowledge, etc. There are plenty of books on it and one can certainly start small.***

Do you feel it is more common to go the rental route or the buy/fix/sell route? If rentals are more common, is it the rental of a single family home, multi-family home or apartment complex?

***I would suggest reading a few books (browse through amazon) specifically catered to "first time landlord" or "being a landlord" etc. Don't worry about the "zero down" or "other people's money" books. First decide if you even want to be a landlord.***

And I just happen to have $30 in Amazon gift certificates! Now I can hunt for something that might help with my learning process.

***Then, try it. The only thing you can do is try. We had 3 rentals in which we were the direct landlord - HATED IT. HATED IT. HATED IT. Now, we don't have to do a thing as we hired a management company, LOVE IT LOVE IT LOVE IT.***

That is one thing that stood out from RDPD was how he said that hiring a good management company can make all the difference. Particularly since they may alert you to new opportunities that they hear about from their grapevine. I am getting very excited about the learning process I have in front of me.

***If you are interested in more information, please feel free to email me privately and I will point you in a specific direction where you can at least ask questions and get some answers.***

Will do and I appreciate the feedback and information that you have already provided!

dt
posted and emailed

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Author: dsemmler Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2494 of 5068
Subject: Re: Books Date: 6/3/2004 7:51 PM
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FriedaChopsticks (can I call you Chops for short?),

There definitely are. Here's one I lurk at: Owning Rental Property. I have found it very insightful.

Thank you for the two links. I will add them to my growing list of boards to lurk/participate. Now all I need is more time to keep up with all of them.

dt

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Author: dsemmler Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2495 of 5068
Subject: Re: Books Date: 6/3/2004 7:53 PM
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Hyperborea,

That should be a warning sign that it is a bad time to be a buyer getting into the rental real estate business. With far more demand than supply prices will be driven beyond "reasonable" value. From what you say it might be a good time to be selling and getting out of the market.

I had the same impression when I read that and was wondering if cyberisme wrote it backwards. To me, business falling off trees would imply there is more than enough to go around. But the description implied otherwise.

dt

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Author: cyberisme Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2498 of 5068
Subject: Re: Books Date: 6/4/2004 8:34 AM
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That should be a warning sign that it is a bad time to be a buyer getting into the rental real estate business. With far more demand than supply prices will be driven beyond "reasonable" value. From what you say it might be a good time to be selling and getting out of the market.

Hyperborea


That's a common misperception. While in areas where the market has skyrocketed completely out of control (which are literally only a few areas of the country), this may be true, in areas where the market is rising, but still affordable this is not true.

It's like trying to decide when to jump ship with stocks.

Long term buy and hold tends to win out in the end.

C.

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Author: cyberisme Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2499 of 5068
Subject: Re: Books Date: 6/4/2004 8:35 AM
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while not having the same open ended potential as running your own business seems to have the greater expected return.

Depends upon if your expectations are low or high.

C.


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Author: cyberisme Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2500 of 5068
Subject: Re: Books Date: 6/4/2004 8:45 AM
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Do you feel it is more common to go the rental route or the buy/fix/sell route? If rentals are more common, is it the rental of a single family home, multi-family home or apartment complex?


You know, I think this is completely individual. My parents did it, but my dad is extremely handy. We tried it on one home, NOT!!! DH is not handy and I have no inclination to do it all myself - so we hired out and sold. Not nearly as much profit.

We are going rentals - my family also does commercial land, etc. We are buying duplexes - it helps secure the risk a little better because the odds of both sides being vacant at the same time is much lower. Our next purchase will be a 4-plex - as we are able to save more, we buy more.

FWIW, we put 10% of our gross immediately into our retirement accounts. Then we tithe 10%. Then, we take another 15-20% of our gross and put it in our "investment fund" - which buys rental properties. Sometimes we get in for zero down, sometimes 5%, sometimes 10% - the more units the property has, the more down that is required. single family homes are around 5% (non-owner occupied), 4-plexes are around 10% (non-owner occupied).

We put enough down that we don't have to feed the property ater all expenses. And, we keep a 3-6 month reserve. Statistically (where we invest) the vacancy rate with my parents company, is less than 5% - always has been, usually it's much lower, it's high right now simply because they just had several dozen units completed and are in the process of renting them out.

Some people don't mind feeding the properties a $100 or so a month - depends on how you feel. I don't and my parents don't.

Zero down deals are not usually available to the average investor - simply because lack of knowledge and where to find them. When you have contacts, you can network and find these deals - usually an owner that owns the property free and clear and would like a monthly income from it. Pay closing costs and they'll carry the loan. If you can "flip" these immediately into a lease purchase - say requiring a couple thousand dollars down, plus a lease payment a couple hundred dollars higher than your mortgage payment - and raise the price of the home accordingly, you can make money immediately.

We've bought a couple properties on lease purchases - but always to our advantage, not in the scenario above - which gave us a zero down and didn't have to get a mortgage immediately.

There are so many ways and so many opportunities.

The best things for most people is to start with a single family or a duplex and get their feet wet and see what they think.

I'll check my email later today and email other information privately.

C.

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Author: cyberisme Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2501 of 5068
Subject: Re: Books Date: 6/4/2004 8:47 AM
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I had the same impression when I read that and was wondering if cyberisme wrote it backwards. To me, business falling off trees would imply there is more than enough to go around. But the description implied otherwise.

That's what I meant - that there are more investors right now than properties available, hence the waiting lists.

C.

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Author: Hyperborea Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2502 of 5068
Subject: Re: Books Date: 6/4/2004 11:01 AM
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while not having the same open ended potential as running your own business seems to have the greater expected return.
-----------

Depends upon if your expectations are low or high.


"Expectation" in the probability sense. That is multiply the each of the value of the outcomes for a particular choice by the probability of it occuring and add them up. That is the "expected" outcome.

A simple example is buying lottery tickets. If each ticket costs $1 with a potential prize of $1M and there are 10M tickets sold then the expected return is:
expected return = outcome x probability = $1M x (1/10M) = $0.10

In the more complicated case of the difference between owning a business or being an employee you would have a lot more possible outcomes. For the business owner the outcomes would have a very wide range from going bankrupt to becoming a Fortune 500 company with the probabilities scattered. Same for the employee option but the high end would be lower but the probability of good outcomes in the middle would likely be higher.

Hyperborea

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Author: FoolStreet Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2503 of 5068
Subject: Re: Books Date: 6/4/2004 12:24 PM
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Business is literally falling off trees right now under the "investment" realm. Meaning, there are more investors/buyers than properties and there are waiting lists for properties. It's incredible.

That should be a warning sign that it is a bad time to be a buyer getting into the rental real estate business. With far more demand than supply prices will be driven beyond "reasonable" value. From what you say it might be a good time to be selling and getting out of the market.

Hyperborea


gotta agree...the point of investing is buying under intrinsic value (read buffett?)...if everyone is bidding up RE investment properties, then they are not being bought under intrinsic value. then it's not so much as investing as speculating on future appreciation

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Author: FriedaChopsticks Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2507 of 5068
Subject: Re: Books Date: 6/4/2004 2:59 PM
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FriedaChopsticks (can I call you Chops for short?),

Absolutely.

Thank you for the two links.

Glad I could help. It's nice to turn the tables once in a while!

FC

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