Residual income refers to the income that remains after all necessary expenses have been paid. It is often associated with investments or business ventures that continue to generate revenue over time, even when active work is not required. This type of income can provide financial stability and freedom, allowing individuals to focus on other pursuits. In the context of personal finance, residual income can be calculated by subtracting total expenses from total income. It is a key concept for evaluating the profitability of investments, such as real estate or stocks, and can help individuals assess their financial health and future opportunities.