The old saying "Know Thy Self" implies that man does not know his own nature completely and in truth. Just as an illusory snake is superimposed on the rope, similarly an illusory personality is superimposed on the real self. Thus a man tends to think of himself as other than he really is.

This state of misidentification is traceable to the misconceptions that the soul is identical with the physical body. The conviction that this gross physical body is myself is the cause of mistaking one thing for another. "I am this physical body which is liable to be damaged by time; I have been scolded by such and such person" these and such-like statements are applicable to the relationship of the gross and subtle physical bodies.

The real unalloyed "I" has no beginning nor end. I am neither the gross physical body, nor also the mind. I am not the emotions that change when the morning changes into noon and noon into evening. I am not the mind which is sometimes cheerful and at other times miserable. I am the self who is experiencing the physical, mental, and emotional operations of body and mind. The real self, which is the spirit soul, is obscured by the cocoon of false identification with the gross body, mind and senses, which are nothing but coverings of the real self, and so the living entity imagines himself to be a product of this material world.

Therefore to differentiate between body, mind and soul, or matter and spirit, is the first step in yoga.

Everyone can observe that his body and mind is constantly changing from infancy to boyhood, to old age and death, but that the self inside the body is always the same; it does not change. The changeless self is the observer of the changing body and therefore ever different from the physical body, which is its object. As the observer is different from that which is seen; similarly the self which is the witness of everything can never be the same as that which is witnessed. The changeless self, which is transcendental by nature, is therefore not the body, mind or intellect but the spirit soul which is encaged within this material body.

The Srimad-Bhagavatam describes the nature of the self as follows:

"Just as fire, which burns and illuminates, is different from firewood which is to be burned to give illumination; similarly the seer within the body, the self-enlightened spirit soul, is different from the material body, which is to be illuminated by consciousness. Thus the spirit soul and the body possesses different characteristics and are separate entities." [11.10.8]

"Just as fire may appear differently as dormant, manifest, weak, brilliant, and so on, according to the condition of the fuel; similarly, the spirit soul enters a material body and accepts particular bodily characteristics." [11.10.9]

Such analytical study leads to differentiation between body, mind and soul. This process of understanding is also known as self-realisation and called in the vedic scriptures 'aham-brahmasmi :I am spirit'. This means that one should understand that he is spirit soul and not this material body.

please also see:
Understanding the Spirit Soul
The Dream Personality


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