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Morning Coffee – How to find a $2m side-hustle for 2023. Jefferies warns its bankers not to whine at bonus time

Happy New Year!  After a disappointing 2022, bankers who are returning to the office this week will no doubt be greeted by messages from their bosses telling them that the new year is a blank piece of paper, there is everything to play for and to ignore any rumours that they’re hearing.  Nobody really knows how 2023 will play out – there are a number of ways which things could surprise us all – but before we know how this year will be, there is a certain amount of disappointment from last year to be dealt with. 

A survey by Fishbowl found that out of 1,096 bankers surveyed at firms including Goldman Sachs, JPM and Morgan Stanley, 72% “would consider quitting their job if their company cut bonuses in the next cycle”.  That might be taken to indicate that at least 788 bankers simply haven’t been paying attention, but it’s an understandable emotion.  The job isn’t such fun that it would be worth doing without the money, and “considering” quitting doesn’t mean the same thing as doing it.  It just means spending a bit of time thinking about how to maybe make a bit more money.

The trouble is, of course, that the correlation is all wrong – profitable side hustles are a lot easier to come up with when the markets are doing so well that you don’t need them.  Although nothing’s certain in this crazy world, it doesn’t feel right now as if anybody’s going to quit their job at Goldman Sachs this year because they made so much money off Dogecoin.  Being an influencer might be more of a possibility, but giving dubious “trading advice” is a crowded field, and most bankers don’t have the looks for Instagram or the moves for TikTok.

The best side-hustle, then, might be something that you’re already good at.  Kat “Miss Excel” Norton, for example, makes nearly $2m a year, working four hours a day recording viral videos to promote her popular line of spreadsheet courses.  That niche is probably filled by now, but there are plenty of other things that people might need training on – things like “sounding like you know how to code in Python”, perhaps, or “talking convincingly about ESG without being accused of competencewashing

There’s probably even room for one or two more really good financial meme accounts – Wall Street Confessions and Litquidity seem to have expanded the category rather than taking share from each other, and Rich Handler still might have a few minutes left in the day to provide free advice in the comments.  Ghost writing tweets for venture capitalists also feels like it might not be played out yet – if anyone can come up with pithy 280 character excuses for having failed to do due diligence on a crypto fraud, they might be able to monetise that more than once in 2023.

Just don’t get too desperate.  Although it is a potentially profitable side-hustle, selling off your internal organs is illegal, as a Korean woman recently found out.  Perhaps it might be safer to maintain a lifestyle that can be supported on your basic salary alone.

Elsewhere, the latest Jefferies Leadership Letter is full of the general macro views and industry insights that Rich Handler and Brian Friedman specialise in, but employees of a cynical cast might have focused on one particular sentence.  “Let’s just spell it out here: “This is going to be a more difficult compensation season at Jefferies, just like it will be for every firm in our industry.”

It’s part of a general trend in the expectation management season – management statements which are intended to convey the subtext “whatever happens, no tears”.  This year, there will be a lot of perceived unfairness.  Compensation will be redirected to even things out between teams who had a good 2022 and those who are considered strategically important.  People will be paid for their potential and for retention, as well as for their performance.  Zeroes will be handed out to people who, objectively speaking, weren’t all that bad.  And banks (like Jefferies) who have been growing rapidly may have committed a lot of the pool to senior hires made last year.  In general, people are going to be pointing to C-Suite initiatives that didn’t pan out, and grumbling.

The message from management is clearly that they don’t want to hear it.  One poor year, coming after several fantastic ones, and in a world in which a lot of people have much bigger problems, isn’t really something to complain about.  As Handler and Friedman point out, “you will look back on these past four years (and the 30 behind them) and be appreciative and thankful”.  And if banks are planning staff cuts, it might be a bad idea anyway to go around loudly advertising that you weren’t considered to be one of the top performers.

Meanwhile …

John Waldron, the president and COO of Goldman Sachs, more or less confirms the rumours and suggests that “Everyone I know in my job or David’s job is doing the same thing”. (FT)

“Can’t retire, not worth it to work, you’re the poorest rich person in America”.  Is five million dollars the cursed amount of money? (RAD)

Martin Shkreli advises Sam Bankman-Fried to shave his head and develop a taste for rap music.  He also needs to “take a crash course in gang culture” to survive in prison. (Financial News)

The long shadow of Jeffrey Epstein hasn’t quite been got rid of; JP Morgan and Deutsche are back in court trying to get cases dismiss on the basis that there’s no plausible connection between Epstein’s crimes and having a bank account. (Bloomberg)

One major money-saving tip for bankers in London in 2023 is to stay married – it continues to be “the divorce capital of the world for the super-rich” and to make very expensive judgements in favour of spouses. (Business Insider)

“I will be ridiculed for this position”, said CNBC’s Andrew Ross Sorkin, before calling for children to be banned from the first class sections of aeroplanes, and then being ridiculed for it. (NY Post)

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AUTHORDaniel Davies Insider Comment

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