In 2019, Dominic Lau, a partner at Ripple Ventures, a Toronto-based VC firm, was looking for ways to help startup founders and VCs from underrepresented groups. His answer was the RippleX Fellowship Program, aimed at teaching and mentoring graduate and undergraduate students focused on entrepreneurship or breaking into the VC industry. To that end, there has to be 50% gender diversity and a minimum of 90% ethnic diversity in each cohort.

Since its founding, the program has evolved while staying true to its mission of serving underrepresented students. For example, it recently finetuned its admissions process to make the system more equitable. And last year, RippleX started a separate fund for startups launched by students, as well as other founders who aren’t in the program. “DEI is truly in our DNA,” says Nazuk Thakkar, program manager, who is also an associate at Ripple Ventures.

A Two-Track Cohort

Open to undergraduate and graduate students in North America, the RippleX Fellowship program runs three times a year during the school semester with two tracks—one focused on entrepreneurship, the other on becoming a VC. The remote program, open to 25 students in each cohort, includes biweekly discussions, workshops with experts, and hands-on projects. For would-be founders, topics include such subjects as product-market fit and the basics of term sheets. Those who want to be VCs learn about how to evaluate a startup and how to break into the industry, among other matters.

There’s also a free public course open to anyone, including people who aren’t students or are located outside of North America.

A New Fund

In 2022, the fellowship launched the Fellow Fund, a separate fund which invests $25,000 to $50,000 in some student startups, depending on the stage of the company. It’s also open to first-time and underrepresented founders who aren’t in the program. Fifty percent of investments are allocated to founders who identify with underrepresented groups.

So far, the fund has made two investments in startups launched by entrepreneurs who took the public course: Artemis, which is developing a data modeling tool for business, and Waive the Wait, which has a platform that helps doctors with daily tasks, aimed at reducing burnout.

Finetuning the Application Process

Over the past year, the program also has refined the process for reviewing applicants. For example, a four-person review team, all alums, is comprised of only people of color, with 50% gender diversity. In addition, reviewers don’t look at schools or GPAs. And they make sure every applicant is screened by each team member at a different step in the process.

With a total of over 1,000 students in the 13 cohorts offered so far, there’s an 80% ethnic diversity rate and 50% gender diversity, according to Thakkar. The program also has helped underserved founders raise around $50 million in VC funding and placed 50 students from underserved backgrounds into VC roles, she says.

Thakkar attended a cohort in 2021 while she was a student at Smith School of Business at Queen’s University in Kingston, Ontario, determined to break into venture capital. Now, in addition to helping to run the fellowship program, she’s also a VC at Ripple Ventures.

A sound understanding of how to calculate debt-to-income ratio is critical to your overall financial health. Rather than guess and hope for the best, this blog post breaks down everything you need to know about the debt-to-income ratio. 

What is a Debt-to-Income Ratio?

Debt-to-income ratio (DTI) is a financial metric that shows how well you manage debt repayment in relation to your total income. 

In short, it’s the percentage of your gross monthly income that goes towards paying your monthly debts. Lenders use this to gauge your creditworthiness and risk level, influencing whether you get approved for loans and the interest rates you’re offered. 

A lower DTI signifies stronger financial stability, which means you’re not overburdened with debt. Conversely, a high DTI may suggest financial stress and make securing loans or desirable interest rates challenging. 

What is the DTI Formula?

The debt-to-income ratio formula is straightforward: divide your total monthly debt payments by your gross monthly income. From there, multiply the number by 100 to convert it into a percentage.

Take, for example, a consumer with $3,000 in monthly debt payments and $6,000 in monthly gross income. Here’s the debt ratio formula you can use: 

• $3,000 / $6,000 = 0.5 
• 0.5 X 100 = 50%.
• DTI = 50%

With this simple formula, calculating your DTI is something you can do at any time.

How to Calculate Debt-to-Income Ratio

A few steps are involved in understanding how to calculate your debt-to-income ratio. 

First, add up your monthly debt payments. This includes mortgage or rent payments, car loans, student loans, credit card debt, and other recurring debts. 

Next, determine your gross monthly income. This is your income before taxes or other deductions. 

Finally, as noted above, divide your total monthly debt by your gross monthly income, then multiply the result by 100 to get your DTI as a percentage. 

Tip: as you calculate your debt-to-income ratio, be sure that you’re using up-to-date and accurate numbers.

How Does DTI Affect My Ability to Get a Loan?

When comparing DTIs, lower is always better. A lower number increases the likelihood of loan approval at the lowest possible rate. 

The lower your DTI, the greater the chance you can comfortably manage your monthly debt loan on the income you earn. 

Generally speaking, a DTI of 36% or lower is viewed as favorable. On the other hand, a high DTI, typically defined as above 43%, suggests you’re carrying substantial debt relative to your income. This could raise red flags for mortgage lenders, making them more hesitant to approve your loan. 

What is a Good Debt-to-Income Ratio?

The word “good” in the debt-to-income ratio varies from lender to lender. Generally speaking, a good DTI is anything below 36%. A number in this range shows you have a manageable balance between debt and income.

Taking this one step further, most lenders closely examine the expenses within your DTI percentage (front-end and back-end DTI). For example, if you have a DTI of 36%, they may work off the assumption that no more than 28% of your gross monthly income should go toward housing expenses. The remaining 8% should cover other types of debt, such as car payments, credit card payments, personal loans, and student loans. 

It’s important to note that while a lower DTI improves the odds of securing a loan at a competitive rate, it’s only one factor that lenders consider. They also look at your credit score, credit history, credit report, credit utilization ratio, employment history, and bank account balances.

What is front-end debt-to-income ratio?

The front-end debt-to-income ratio is a subset of your total DTI. It represents the proportion of your gross monthly income that goes towards monthly housing costs like mortgage payments, property taxes, homeowners insurance, and any applicable homeowners association dues. A lower front-end DTI generally indicates better financial balance.

What is back-end debt-to-income ratio?

The back-end debt-to-income ratio is a broader measure of your financial commitments. In addition to housing expenses, it includes all recurring monthly debt obligations like auto loans, student loans, credit cards, and child support. All loan payments are factored in. Depending on the type of loan, debts are likely to be paid off at some point, which will improve your ratio. 

Your total debt obligations are a percentage of your gross monthly income. A lower back-end DTI is typically more favorable in the eyes of a lender. 

Now that you know how to calculate your debt-to-income ratio, you can track your overall financial health more accurately and consistently.

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Bank financing for entrepreneurs is harder to get these days, thanks to rising interest rates and the collapse of Silicon Valley Bank. That’s especially problematic for entrepreneurs of color, who typically have a harder time getting financing than their white peers. One answer is to help Community Development Financial Institutions (CDFIs) increase their lending, especially to underbanked founders.

That’s where Entrepreneur-backed Asset (EBA) Fund comes in. With the aim of helping to boost lending by CDFIs, the nonprofit creates a new secondary market for CDFI loans. “The ultimate goal is to create an industry-wide change that makes pools of funding available to CDFIs, allowing them to better manage their balance sheets and growth and do it in a sustainable way over the long-term,” says co-founder Brett Simmons.

Pooling Microloans

Many CDFIs focus, at least in part, on businesses owned by women, people of color, immigrants and other groups that historically have had a tough time getting funding from the traditional financial system. But their resources typically are constrained by their own variable sources of funding—philanthropy and the public sector, as well as banks trying to meet their Community Reinvestment Act (CRA) obligations.

To address that problem, EBA Fund increases CDFIs’ liquidity through a new secondary market for their microloans. To that end, it pools loans in packages to sell to banks. That, in turn, accomplishes a few goals: Letting CDFIs free up assets to make more loans and helping banks meet their CRA lending tests. “We’re changing the incentives for lenders,” says Simmons. In addition, EBA Fund donates premiums on loan sales back to CDFIs, increasing capital flow.

Simmons estimates that EBA Fund has already freed up $41.5 million in potential loans to underbanked small businesses.

Moving Up the Launch

Simmons and co-founder Jonathan Brereton got the idea for EBA Fund a few years ago, after they formed Revolve Asset Management to facilitate transactions between CDFIs and banks. Their experience highlighted the value of creating a fund that could serve as a market-maker for these transactions, addressing mismatches in timing between when CDFIs want to sell and when banks want to purchase, and adding elements such as third-party risk rating and back-up servicing that reduce risk to bank purchasers. The fund would be managed By Revolve.

By early 2020, Simmons and Brereton, working with the Microfinance Impact Collaborative (MIC) and the Aspen Institute Business Ownership Initiative (BOI), developed their business plan, intending to launch later in the year. But, after the pandemic hit, they moved up their timeline to April and started rolling out the service that summer.

The real secret sauce, according to Simmons, comes from that combination of selling banks CDFI loan packages and charging a premium, 75% of which ERB gives back to the CDFIs. “As a result, we generate more revenue for our CDFI partners,” says Simmons—a total of $3.5 million over the last three years. “We really hit our stride in the last six months,” says Simmons.

To date, the ERB board has vetted and approved 20 CDFIs to be part of the ERB system and has bought loans from 13 of them. Seventy-percent of those loans have been to entrepreneurs of color.

Funding for ERB has come from a variety of sources, including Citi Foundation, the Bill and Melinda Gates Foundation and others.

New York City-based Accendus, which targets low-to-moderate-income small business owners, started working with EBA Fund about two years ago and has done around $1 million in loans through the program. “We see this as positive for the field,” says CEO Paul Quintero. “EBA just got started. They’re going to build an inventory of loans to attract a bigger marketplace.“

Rent prices tend to increase in spring and summer as more people seek new rental homes, but lower demand alongside new inventory keeps rent prices nearly flat nationally. In some states, however, an influx of new residents is causing median rents to grow, according to a May report from Rent.com. The trend is clear: People are moving to areas with strong economies that still have affordable rent and housing prices. In the states where rents are rising the fastest year-over-year, the median rent is still relatively low compared to the national median.

Nationally, rents were up just 0.29% year-over-year in April. The month-over-month decrease from March to April was -0.23%, following a 1.77% uptick from February’s low to March. The national median rent now sits at $1,967. Monthly declines have slowed, but that may be due to the season—there’s no telling whether the national median rent has ended its descent. In nearly 79% of markets, however, rents are still growing year-over-year. And in some Southern and Midwestern states, rents are rising at double-digit rates. 

States with the Highest YoY Rent Growth

In all 10 states where rent prices are rising the fastest, the median rent is below the national median. Most states are in the South and Midwest, except for New Hampshire. South Dakota leads the pack with a near 29% year-over-year increase plus a 2.9% month-over-month increase. Housing costs and property taxes are rising more rapidly in the state than elsewhere, as cities like Sioux Falls draw new residents in droves. 

States with the Largest YoY Decreases in Rent Prices

Only nine states saw year-over-year rent decreases across their cities. In many Mountain West states, rents are cooling years after an early pandemic migration boom. For example, Phoenix and Austin were both pandemic boomtowns and now rents are falling in those cities, which may be driving the downward trend for their respective states. 

Notoriously high rents are flat year-over-year in California, while they’re up in Florida, New York, and Tennessee. While rent decreases year-over-year in only about 21% of markets, nearly 43% are down month-over-month. 

Rent increases have cooled nationally due to an increase in the multi-family housing supply, coupled with recession fears that have curbed the demand for rental homes as more people stay put or move in with family or roommates. And that may continue, particularly if the U.S. economy falls into a recession. The rental market is just as uncertain as the housing market—although some investment firms are betting on a long-term rental boom in 2024 and eying build-to-rent developments as an attractive investment opportunity. 

The Bottom Line

Rent prices have fluctuated since last fall but are just about flat year-over-year. Existing home sales have also been growing and shrinking, and uncertainty remains regarding the fate of the U.S. economy. The Fed could achieve a soft landing—or unemployment could rise, and housing prices could fall further. Investors need to use all the information available to them, including changes in rent prices, to make their best guess about how individual markets will fare. But they should also be prepared for all outcomes and enter into investment decisions with a backup plan.

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

Dallas Tanner, Invitation Homes CEO, joins ‘Closing Bell: Overtime’ to discuss the rising rate environment and its impact on the housing market

Although ancient Greek philosophy isn’t the first thing that comes to mind when you think of modern tech startups, during your startup journey you’ll find that a large part of your struggles are related to your own character and are not that unique to modernity. Some of the best advice on the subject is one that has withstood the test of centuries.

In this article, we continue our dive into ancient wisdom applied to a modern startup context by exploring 10 quotes from four famous Ancient Greek philosophers.

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1. Plato Quotes

“The worst of all deceptions is self-deception.”

Self-deception can be a detrimental pitfall for startup founders. This is why the key to success in early-stage startups usually lies in validating your own ideas and assumptions before investing resources into building a real business.

“For a man to conquer himself is the first and noblest of all victories.”

As mentioned earlier, most of your struggles as a founder would be related to your own character. You’d have to find the strength to push yourself to do the things that you know need to be done despite being outside of your comfort zone.

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2. Aristotle Quotes

“We are what we repeatedly do. Excellence, then, is not an act, but a habit.”

Success doesn’t come from occasional bouts of inspiration and passion. It comes from putting in excellent work day in and day out.

Through continuous learning, refining skills, and embracing a growth mindset, you can create a foundation for long-term success. Is your average day something that would lead you to success if you repeat it indefinitely?

“You will never do anything in this world without courage. It is the greatest quality of the mind next to honor.”

Daring to succeed is synonymous with accepting that you might fail and being OK with bearing these consequences. You need the courage to face daily the never-ending uncertainties of the life of a startup founder.

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“Moral excellence comes about as a result of habit. We become just by doing just acts, temperate by doing temperate acts, brave by doing brave acts.”

While this quote is focused on building character (which is entirely applicable to startups), it is also how you build skills. You learn to build by building, to sell by selling, etc.

3. Heraclitus Quotes

“Character is destiny.”

This is another iteration of the idea that in order to succeed, you need to become a person capable of success. Focusing on personal and professional growth is crucial for your long-term success.

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“There is nothing permanent except change.”

This is a statement that you need to celebrate, because as a startup founder change and volatility are the environment in which you can out-maneuver and out-smart the established big players on the market. Without change, there would be no startups. Dealing successfully with considerable changes in the world is why innovation is required in the first place.

“Big results require big ambitions.”

Last but not least, you need to be comfortable thinking about scale. Startup success is quite often nothing more than finding small-scale validation for the solution of a problem and scaling it up sustainably to a larger market.

4. Socrates Quotes

“The way to gain a good reputation is to endeavor to be what you desire to appear.”

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Since projects come and go, a good reputation of competence and integrity is crucial for your long-term professional success, and the startup field is no different.

Don’t sell your integrity for short-term gains. You win at the startup game by being able to play for as long as possible, and you need the support of people around you to do so.

“An unexamined life is not worth living.”

Finally, it’s worth stopping every once in a while to check the compass and evaluate if you are on the right track professionally (and personally). Successfully building a business from scratch is an extremely difficult task. Make sure you are doing it for the right reasons and that you are enjoying the journey, not just coveting the destination.

Several days ago, the Wall Street Journal published an article about real estate syndicator Applesway Investment Group (owned by real estate entrepreneur Jay Gajavelli), which lost more than 3,000 apartments across four rental complexes that went into foreclosure. 

What led to one of the largest commercial real estate bursts since the financial crisis of 2008? In a nutshell, Gajavelli’s company held floating interest rate loans where payments ballooned. Inflation brought higher expenses, but rental revenues could not compensate for the difference. Thus, bills became overdue, ultimately leading to these properties’ foreclosures. Thousands of individual investors looking to generate passive incomes (without being a landlord) have now been left empty-handed. 

Should Individual Investors Be Worried About a Potential Housing Bust? 

Between 2020 to 2022, syndicators raised a staggering $115 billion. As well, there were over 300,000 investors who participated in syndications in 2021, according to Financial Samurai. 

As much as I would like to believe that this is a one-off scenario, I’m leaning towards that this could have a ripple effect that could affect the industry.  

Assuming that other major syndicators carry loans with variable rates (without an interest rate cap), they will feel the financial pressure of increased payments. This is due to the Federal Reserve aggressively hiking interest rates for the 10th consecutive time since March 2022. And syndicators most likely won’t be able to escape from renewing at higher rates in the near future. 

Aside from that, there are a variety of factors where things can go downhill. For instance, having poor property management, underestimating operating expenses, and a shortfall in rental income to keep them afloat could cause the business model to weaken. It won’t be nearly as devastating as the housing market crash in 2008, but I wouldn’t be surprised if we see a handful of syndicators go belly up this year.

What Should Be Done To Protect Small Investors?

I personally believe that all of this could have been prevented had the government—at both the state and federal levels—taken more responsibility to protect individual investors. 

I’ll give Congress the benefit of the doubt that they had good intentions in passing the JOBS Act in 2012, allowing syndicators to advertise real estate investment opportunities online. This made it more accessible for American families to invest. On the surface, this sounded like a great idea. In reality, the cracks in the system have led to this devastating outcome. 

It’s a complex problem that won’t be solved overnight. However, there should be accountability for all stakeholders involved. For one, I believe that syndicators should take responsibility by being transparent about their financial performance to their investors. Regular reporting to all their investors would go a long way in building trust between both parties.

Further, there should be more legal protection provided to individual investors. If I were in their shoes, I would want to know how my investment is doing and not be blindsided until it’s too late. 

Also, shouldn’t syndicators have skin in the game? If they’re asking for investors to pony up large sums of money, shouldn’t they do the same? 

These victims are hardworking citizens trying to fulfill their “American dream.” Now thousands of lives (possibly more) are in shambles because of this flawed system. It’s a tough lesson for these small investors who must rebuild their financial nest egg. 

How Can You Protect Yourself As An Individual Investor? 

If you want to become a passive investor with a syndicator, here are a few ways to be proactive and protect yourself. 

1. Network with other investors to find a reputable real estate syndicator who can prove they have a successful track record. The BiggerPockets forum is a great place to start.
2. Research and vet the company to ensure they are trustworthy.
3. Understand your risk tolerance before you hand over large sums of money. With real estate, there are always risks involved.
4. Don’t put all your eggs into one basket—or you may be the one left holding the bag.
5. If it sounds too good to be true, it probably is. Don’t give in to the FOMO. A company should not be overpromising or guaranteeing unrealistic returns in a short time frame.

Hopefully, with these tips in mind, you can make educated decisions about what real estate investments suit you. Again, we can’t predict what will be the fallout of this event. It could be isolated. But I stand by that if foreclosures can happen to one syndicator (and unless others are being more diligent), then we may see more on the horizon.

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

Technology is digital marketers’ gateway to lead gen and relationship building. So it’s no surprise that the rise of AI is reshaping their approaches. But because AI itself is evolving, some skepticism and hesitation are natural.

Will this emerging technology’s capabilities transform online marketing to the point where it’s unrecognizable? Or can companies leverage it so it’s a positive and fruitful source of disruption? Here’s how AI stands to impact the digital marketing world and influence marketers’ strategies.

Laser-Focused Content Creation

Without online content, digital marketers can’t reach their target audiences. But the content creative teams spend precious time crafting doesn’t always make a splash. You can carefully map out a content strategy with every single detail, including desired outcomes for each piece. Yet you’ve got to have the talent to produce those pieces at a high level of quality and a breathtaking pace.

Constantly brainstorming and executing content ideas to perfection is unrealistic, even for teams at the top of their game. Inevitably, human brains come to a standstill. Call it writer’s block, a rut or a creative slump. It happens to content creators all the time. And the pressure to produce something can mean pieces that don’t match a strategy’s ambitions.

While the debate rages as to whether AI will replace human content creators, it can be a good ally. AI can generate outlines based on inputs, such as audience characteristics, keywords and search intent. The technology is able to build structures for entire blog posts or articles, helping writers focus on the points they need to drive home to specific audience segments.

AI tools developed by content marketing firms such as MarketMuse elevate those capabilities. With the help of ChatGPT, the tool makes outlines infused with topic modeling data that can then be turned into blog posts ready for a human touch. Content teams can fine-tune those pieces, ensuring they match strategic intent.

AI saves time by streamlining the creative process. It also helps raise the bar on quality, so published pieces produce better outcomes and content strategies come to fruition.

Targeted Predictions

Marketing strategies develop from data about human behavior. However, digital marketers may discover what they thought they knew about an audience isn’t quite right. Or the information they have is too generalized. It doesn’t provide enough fine-grained insights to develop a goal-crushing campaign.

Digital marketers also see market data through a subjective lens. They may miss patterns because of biases and assumptions. Even the culture of the companies marketers work for can influence the interpretation of data such as customer surveys. Executives looking for a quick fix may unknowingly promote a “be everything to everyone” approach. Consequently, digital marketing messages become too generic.

But AI can sort through large volumes of market data without ego. The tools pick up on patterns across multiple sources, including chatbot conversations and social platforms.

While AI can inform digital marketers of aggregate audience insights, it also shows what’s happening at the individual level. A customer’s past Starbucks coffee purchases can predict if they’ll engage with promo messages in an app. AI helps personalize strategies so they feel more conversational.

Augmented Reality Experiences

Augmented reality is expanding the definition of content marketing. Customers are looking for more than words and videos to engage them. A NielsenIQ survey of shoppers shows 56% say augmented reality increases their confidence in a product’s quality. And around 61% of consumers prefer to shop with brands that offer AR experiences.

When digital marketers use augmented reality, it can influence customer behavior, engagement and sales. The technology encourages shoppers to linger longer. They’re more likely to try more products in online environments. AR experiences can also boost sales. That said, research shows the technology is more effective with brand-new buyers.

Digital marketers targeting new audiences may want to incorporate augmented reality into their strategies. Retailers such as Crate & Barrel already offer this capability to shoppers who may have concerns about buying items like furniture online. Exploring AR environments helps overcome objections to the sale by showing how purchases will look and feel in people’s homes.

These experiences can also extend to behind-the-scenes content about a brand and its locations. People unfamiliar with a company and its products are able to interact in a low-risk environment. They can learn about a brand’s values, gain knowledge about its offerings and “visit” locations they otherwise wouldn’t be able to. Interactive content with built-in augmented reality builds trust and interest without coming across as intrusive.

AI’s Impact on Digital Marketing

AI promises to change how the world works, including the ways digital marketers reach audiences. While relying on technology to drum up interest and sales is part of a digital marketer’s playbook, AI expands it. With the tech’s abilities, your strategies can become more streamlined, personalized and engagement-oriented.