Income is a monetary value that you receive, e.g. in return for working or in other forms. Depending on the place you are living in, income may be taxed by the government.

Active and passive income

Income can be split into active income and passive income, depending on where it's coming from.

"Income" = "Active income" + "Passive income"

Active income is created through putting actual work/hours in. The most prominent example is the salary you get for a job.

On the other side, passive income is money that doesn't involve the investment of your time. Examples of this are dividends, interest payments or the monthly rent you get from your tenants (in case you own real estate). It's the goal of many people to purely live from their passive income.