How to Create Passive Income from RSUs Without Selling Them?

Seeking Advice/Help
1

Hello everyone…

I have some RSUs (Restricted Stock Units) from companies like Amazon and a few others, and I’m interested in finding ways to generate passive income from them without having to sell the shares. I’ve recently started selling calls at high prices to earn a bit of weekly income, but I’m curious if there are other methods that might be safer or potentially better.

Does anyone have experience with this or suggestions on how to create passive income from RSUs without selling the stock? Any advice on strategies or approaches would be greatly appreciated…Thanks :wink:

2

Hi there!

It’s great that you’re exploring ways to generate passive income from your RSUs without selling them.

Here are a few strategies you might consider:

  1. Selling Covered Calls: As you’ve already started, selling covered calls can be a good way to earn premium income. Just be cautious about the strike prices and expiration dates to avoid having to sell your shares.

  2. Dividend Reinvestment Plans (DRIPs): If the companies issuing your RSUs pay dividends, you can enroll in a DRIP to automatically reinvest those dividends into more shares, compounding your investment over time.

  3. Peer-to-Peer Lending: You can use the dividends or any other income from your RSUs to invest in peer-to-peer lending platforms. This can provide a steady stream of interest income.

  4. Real Estate Investment Trusts (REITs): Consider using the income from your RSUs to invest in REITs, which can offer regular dividend payments and potential capital appreciation.

  5. Tax Strategies: Efficiently managing your RSU taxes can help you keep more of your money. Strategies include adjusting tax withholdings, timing sales to optimize tax impact, and even donating RSUs to charity for tax deductions.

  6. High-Yield Savings Accounts or CDs: If you prefer a safer approach, you can place the dividends or other income from your RSUs into high-yield savings accounts or certificates of deposit (CDs) to earn interest with minimal risk.

Each of these strategies has its own risks and benefits, so it’s important to consider your financial goals and risk tolerance.

Consulting with a financial advisor can also provide personalized advice tailored to your situation.

3

To create passive income from RSUs without selling them:

  1. Hold onto Vested RSUs: If the company pays dividends, you’ll receive a share of the company’s profits regularly.
  2. Earn Dividends: The dividends from your RSUs can provide passive income, which you can either use for living expenses or reinvest for growth.
  3. Reinvest Dividends: Consider using a dividend reinvestment plan (DRIP) to buy more shares, compounding your wealth over time.