Passive Income vs. Active Income: What's the Ratio?

When logging income in Rich Dad Finance Tracker, you'll notice we distinguish between Active and Passive.

Why the Distinction?

• Active Income: You work for money (Salary, Freelance). Stop working, money stops.
• Passive Income: Money works for you (Dividends, Rent, Royalties). Earn while you sleep.

The Freedom Formula

Financial Freedom Ratio = Passive Income / Monthly Expenses

• Ratio < 10%: You are fully dependent on your job.
• Ratio > 50%: You are semi-retired.
• Ratio > 100%: Congratulations, you are free!

The 2026 Challenge

Whether your ratio is 0% or 1%, try to increase it by 5% this year. Buy dividend stocks, or rent out that unused parking spot. Watching that "Passive Income Runway" grow in the App is the most satisfying feeling in the world.