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for $150, you can get into the POD Studio UX-1, which is an interface with a slew of guitar sounds plus a mike input (and several preamp models). something like this will take you a long way in your hobby. ... that's actually a cheap entry fee compared to hobbies like golf, woodworking etc.
this is only one of dozens of options, but i mentioned it because i've been thinking about getting one myself.
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