7 Clever Ways to Make Money Off Stocks Without Selling Them

Ever found yourself sitting on stocks that have grown nicely but don’t want to trigger capital gains taxes by selling? Or maybe you’ve got shares with sentimental value that you just can’t part with? I’ve been there too and discovered there are actually several smart ways to profit from your stocks without hitting that sell button.

In this article I’ll walk you through some proven strategies that let you tap into your stock value while keeping those precious shares in your portfolio. These methods aren’t just for Wall Street pros – even us regular investors can use them!

Why You Might Not Want to Sell Your Stocks

Before diving into the strategies, let’s quickly look at why keeping your stocks might be smart:

• Tax efficiency – Selling triggers capital gains taxes
• Long-term growth potential – Some stocks perform better over decades
• Dividend income – Many stocks pay regular dividends
• Emotional attachment – Some shares might have sentimental value
• Estate planning – Passing stocks to heirs has tax advantages

Now let’s explore how to make money from these holdings without selling!

1. Collect and Reinvest Dividends

One of the simplest ways to profit from stocks without selling is through dividends. Many established companies share profits with shareholders through regular dividend payments.

When companies I’ve invested in pay dividends, I have two choices:

• Take the cash – Use for living expenses or other investments
• Reinvest through DRIPs – Dividend Reinvestment Plans automatically buy more shares

For example, if you own 100 shares of a company paying $2 per share annually in dividends, that’s $200 in passive income without selling a single share!

2. Write Covered Calls for Income

This is one of my favorite strategies! When you own at least 100 shares of a stock, you can “write” (sell) call options against those shares. You collect an upfront premium, which is yours to keep regardless of what happens next.

Here’s how it works:

1. You sell someone else the right to buy your shares at a set price
2. They pay you a premium for this right
3. If the stock price stays below the “strike price,” the option expires worthless
4. You keep your shares AND the premium you received

The potential downside? If the stock rises above the strike price, you might have to sell your shares. But you can often set strike prices high enough that you’d be happy to sell at that level anyway.

3. Hedge Positions with Puts

By hedging positions, you can use puts to not only manage your portfolio but to create additional profits without necessarily adding market risk. In addition to protecting paper profits with the use of long puts, you can also trade short-term gains through swing trading.

I’ve used this strategy during volatile markets, and it works like insurance for your stocks. You pay a premium for put options that increase in value if your stocks decline, offsetting some of the paper losses.

4. Use Margin Loans Against Your Portfolio

Many brokerages will let you borrow money using your stock portfolio as collateral. This is called a “margin loan,” and it can provide cash without selling your stocks.

Benefits of margin loans:

• No tax consequences – It’s a loan, not a sale
• Low interest rates – Often lower than personal loans or credit cards
• No repayment schedule – As long as you maintain required equity

WARNING: This strategy comes with risks! If your stocks drop in value, you might face a “margin call” requiring you to deposit more money or sell some shares.

5. Stock-Based Loans from Banks

Similar to margin loans but obtained from banks rather than brokerages, these loans use your stock as collateral. They typically offer:

• Higher borrowing limits than margin accounts
• Fixed interest rates (unlike variable margin rates)
• Potentially better terms for large portfolios

I’ve seen several friends use this approach to fund business ventures or real estate investments while keeping their stock portfolios intact.

6. Securities-Based Lines of Credit (SBLOCs)

An SBLOC is like a home equity line of credit, but instead of using your house as collateral, you use your investment portfolio.

Key features:

• Revolving credit line – Borrow only what you need
• Interest-only payments – Flexible repayment terms
• No capital gains taxes – Since you’re not selling securities
• Competitive interest rates – Often better than personal loans

These are especially useful for managing irregular expenses or investment opportunities without disrupting your long-term investment strategy.

7. Participate in Securities Lending Programs

Many brokerages have programs where they lend your shares to short sellers and split the lending fee with you. When investors want to short a stock, they need to borrow shares first, and they pay fees to do so.

This is truly passive income – your shares are still yours, you still receive dividends, and you earn lending fees on top!

The catch? During the lending period, you might temporarily lose voting rights, and there’s a small risk if the borrower defaults (though brokerages typically provide guarantees against this).

The Power of Compounding: Buy and Hold Strategy

While not technically “making money without selling,” the traditional buy-and-hold strategy deserves mention because it creates wealth without frequent selling.

By simply buying and holding shares for a long period of time without actively trading them, you can benefit from:

• Compounding returns – Einstein supposedly called this the “eighth wonder of the world”
• Lower tax burden – Fewer taxable events and potential for long-term capital gains rates
• Reduced transaction costs – Less trading means fewer commissions

Many of the world’s most successful investors, like Warren Buffett, are primarily “buy and hold” investors who rarely sell their positions.

Real-World Example: Generating Income from a Blue-Chip Portfolio

Let’s imagine you have a $100,000 portfolio of blue-chip stocks. Here’s how you might generate income without selling:

1. Dividend income: Assuming a 3% dividend yield = $3,000/year
2. Covered call premiums: Writing conservative calls might generate 5-8% annually = $5,000-8,000/year
3. Securities lending: Depending on the stocks, might add 0.5-1% = $500-1,000/year

That’s potentially $8,500-12,000 in annual income (8.5-12%) without selling a single share!

Tax Considerations

One huge advantage of these strategies is favorable tax treatment:

• Dividends: Often taxed at lower rates than ordinary income
• Option premiums: Complex rules, but potentially more favorable than short-term gains
• Loans: Not taxable events at all

Always consult with a tax professional before implementing these strategies, as tax laws change and individual circumstances vary.

Risks to Consider

No investment strategy is without risks. When making money off stocks without selling, be aware of:

• Market risk – Your underlying stocks could still lose value
• Leverage risk – Borrowing against stocks can amplify losses
• Opportunity cost – Keeping money in stocks means it’s not elsewhere
• Tax law changes – Future legislation could affect these strategies

My Personal Approach

I personally use a combination of these strategies. For stocks I believe have long-term growth potential, I collect dividends and occasionally write covered calls when I feel the market might be flat or declining.

For my more stable blue-chip holdings, I’ve set up a securities lending program that generates a small but steady stream of extra income. And during periods when I need capital for other investments, I’ve used margin loans carefully rather than selling positions I want to maintain.

Making money from stocks without selling them isn’t just possible—it’s a strategy employed by many sophisticated investors. Whether through dividends, options strategies, or using your portfolio as collateral, these approaches can help you generate income while maintaining your equity positions.

The right approach depends on your financial goals, risk tolerance, and tax situation. I recommend starting small with one strategy that makes sense for your portfolio, then expanding as you gain confidence and experience.

Have you tried any of these methods? Which ones work best for your investment style? I’d love to hear about your experiences in the comments!