![waterfall](http://nikrockstrom.com/blog/wp-content/uploads/2014/12/waterfall-141771_640.jpg)
Passive income can be defined fairly broadly as a stream of revenue you earn even when you aren’t actively working. Another name for passive income is residual income.
By contrast active income is money that stops coming to you when you stop working. If you get paid a salary and you quit your job or get laid off, most likely you’ll stop getting paid. You may get a severance package to help you transition, but your boss won’t keep paying your salary unless you keep showing up for work.
Similarly, if you do contract work for clients who pay