We can understand it through a very simple analogy. If we take the creation as the progressive manifestation of the Divine then each soul is like the seed of the Divine. It has the potential to build a little world for itself by the power of the Divine Idea embedded within it. The Divine is the core, the Idea-Force that drives the tree as a dynamic truth embedded within it. The Idea and the Force are together everywhere. The Idea is the core, the pure passive Existence, the Ishwara or the Lord whereas the Force is the Shakti that carries out the whole journey of the progressive Becoming. So too the term soul is used for the essence of the Jivatma, the eternal portion of the Divine. Its purpose is to represent the Divine in the individual forms of creation. This soul develops through lives through unique adventures of Time and Space by the Idea-Force inherent within it. When fully developed it becomes the psychic being, like a miniature divinity upon earth in Time and Space. The soul is what it is in its essence. The psychic being is what it becomes, manifesting a portion of the Divine in its own unique way.
Or you can look at the soul as a spark of the Fire. The psychic being is each spark growing into a flame by taking in the combustible elements of nature and turning them into its own. So too the psychic being develops as the soul takes in the various experiences of life, both happy and sad, good and bad, turning them for its own growth, using them to release and grow into its own unique divine potential. It is therefore the dynamic possibility embedded in the soul. To release and fully realise its divine possibility by the Idea-Force embedded within it is the very purpose of Rebirth. The psychic being is the soul evolving in real time through actual experiences of life turning its divine potential into the fullness of the Divine in the Manifestation.
Affectionately,
Alok Da
