American Business Brokers - October 2019

Don’t Let Money Get in the Way

TRANSACTIONAL VS. TRANSFORMATIONAL LEADERSHIP The business landscape in America is changing. According to a recent Forbes article, the average life expectancy of an organization in 1955 was 75 years. Today, that figure has dwindled to 15. How can small businesses, or any business, compete in a market that fluctuates now more often than it ever has? The short answer is that we, as leaders, and our employees need to be adaptable. And one way for a business leader to become more adaptable is to become a transformational leader instead of a transactional one. What’s the difference between a transformational leader and a transactional leader? And why does that difference matter? For years, transactional leadership was fairly common, and it can still work well in the short term. Transactional leaders rely on their authority to get their employees to work for them, and they will use reward and punishment as their primary tools of motivation. While this might work well on a day- to-day basis to get employees to complete the tasks in front of them, it doesn’t make them feel invested in their workplace. Don’t Just Order Your Employees — Inspire Them Of Your Grandchild’s Education College expenses aren’t what they used to be. What used to be affordable to any student with a part-time summer job now can take years to pay off. If your grandkids want to go to college, the cost of education should not be a barrier to their future. Luckily, you can help ease that financial burden in a few different ways. Invest in a 529 savings plan. No limits on age, income, or monetary contributions come attached to this college savings account, and contributions are tax-deductible in some states. Just like a Roth IRA, the earnings grow over time and can be used tax-free for qualifying expenses, like tuition and room and board. There are a few downsides, however. Funds from a grandparent’s 529 savings plan are considered student income and could hurt your student’s eligibility for financial aid. If you choose to fund through a parent’s 529 savings plan, which doesn’t count as student income, you lose control over the funds you contribute. Pay their tuition. Not everybody has $20,000 just lying around, but, if you do, using it to pay for your grandchild’s tuition isn’t a bad way to spend it. Normally, annual financial gifts that are exempt from the federal gift tax can’t exceed $15,000, but payments toward someone’s tuition, for any amount, are not taxed. Keep in mind, however, that the money can

only go toward tuition, not toward other college expenses like room and board or textbooks. Help them find opportunities to save. Even if you don’t have thousands of dollars to give, you can still help your grandkids look for other opportunities to save. Thousands of scholarships, grants, and programs are available to help students pay for college, and helping them look online and in your community can go a long way. College could be your grandchild’s first stop on the path to achieving their dreams. You can be a part of that journey by making sure money doesn’t get in the way of that.

do this successfully will motivate their workforce toward accomplishing long-term goals without having to constantly reward or punish them. At the same time, employees who feel more attached to their workplace’s vision and mission are more likely to weather any storms the market throws at them. Transformational leaders tend to be extroverted and agreeable in their interactions with others, but these two things on their own will not make a transformational leader. Studies have shown that high self- esteem forms the base on which all transformational leadership grows. People with high self-esteem can see the ways they can create value in their workplace, and they can properly assess their strengths and weaknesses. This means they can confidently lead others in the direction they should go.

That’s what transformational leaders do best. They use their authority to inspire their employees to join them on their mission. Leaders who can

Do you have the confidence to be a transformational leader in your business?

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