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Sorry if this is a stupid question, but I honestly am having trouble with this. For me to get an autograph, I would have to send an envelope large enough. That's fine, but what I don't understand is how to send it.

Like, I send my letter in an envelope, where does the SASE go? Or is it the same one?

I know, I sound stupid, but this is honestly confusing me!

You put inside the envelope your sending out, another stamped envelope with your address written on it. That's your Stamped Self Addressed Envelope.
Simples