Active income is money you earn by actively doing something, like working a job or running a business. It comes from your direct efforts and stops when you stop working. Examples include wages, salaries, or income from providing services. Unlike passive income, which doesn't require constant effort, active income is tied to your ongoing work or business activities.

Passive income is money you make with less hands-on effort. It comes from investments, like stocks or real estate, where you don't need to work every day to earn. Examples include rental income, dividends from stocks, or interest from savings. Unlike active income, which requires constant work, passive income keeps flowing even when you're not actively involved. It provides financial stability and the freedom to pursue other interests. Building various passive income sources can offer a steady income stream without the need for constant, active work.

Balanced income means having a mix of earnings from both active efforts, like working a job or running a business, and passive sources, such as investments. The idea is to create a well-rounded approach to making money, reducing the risk of depending solely on one type of income. By combining different ways of earning, like working and investing, individuals aim for greater financial stability. This approach provides flexibility, allowing people to adapt to changing circumstances and enhance their overall economic security. It's like having a diversified financial portfolio that includes various income streams to ensure a more resilient and secure financial situation.