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Austin Kelly discusses how to write a personal reference letter, emphasizing that you should only agree to provide one if you know the individual well enough to offer a positive endorsement. The letter should include five key elements: 1) Your relationship to the candidate, e.g., "I volunteered with John at Habitat for Humanity." 2) The duration of your relationship, such as "I have known Korra for over six years." 3) Positive personal qualities of the candidate that are relevant to the job. The letter serves to validate the candidate's character and fitness for the role, highlighting your credible insight into their attributes.