Residual Income

How Residual Income Differs From Active Income

There are two common types of income – active and passive.


If your employment gives you active income, investments in long-term assets shall give you residual income.

These two differs in terms of the amount of time and effort that you spend in it.

It also varies in terms of the benefits and opportunities that are linked to it.

For active types of income, you will see immediate results in the form of paychecks for instance.

But with residual types of income, even if you are not engaged in any task, you can still benefit from it.

In fact, while you are busy spending your time with an active job, the amount of recurring income that awaits you continues to grow.

Some people thought of being employed as the more important income-generating activity to invest in.

But isn’t it also interesting to earn without having to spend the whole day working?