JamesThomas has already given you a good foundation as to what ego is. Here is a post I wrote about ego on another site; perhaps it will flesh out your understanding a bit more:
Quoting you quoting me, 'When you said" Having a 'mission' implies a separate entity who would seek to fulfill that mission - that separate entity does not exist. There are no shoulds and shouldn'ts except within the realm of the ego-bound. " '
'I don't get this part. Please help me understand.'
Ego is the one who would set before itself a 'mission' that needs to be discovered and accomplished, and so it sets forth in search of that mission. A large part of this sort of thinking comes from family upbringing, educational institutions, religious dogma, and what society says.
It will do all sorts of things in the name of finding and completing its perceived mission: fulfillment through relationships, good works, occupation, seeking power of over others, acquisition of wealth, and other sorts of things 'of the world'. When these things fail to bring happiness then it is common for the ego to seek out something within the spiritual realm, and it will chase after various esoteric practices: meditation, chanting, raising the kundalini, astral projection, pranayama, hatha yoga - you name it and ego will think the answer lies there.
All of these practices (and all other practices) are believed by the ego to hold the answer, to be the key in finding happiness, reaching enlightenment, or at least in fulfilling some sort of mission. Years and years (and in some cases decades and lifetimes) are spent in their pursuit in the hopes that some day enlightenment will be gained, happiness will be found, or a life mission completed. The fallacy in all of this is something ego does not want to hear: ego is a phantam, it does not exist in reality.
Ego is simply a conglomeration of thought one has which gives that person a sense of identity, and which separates it from all others; all other people as well as things in the phenomenal world. Ego is maintained by the repitition of its story - the Story of Me.
It is nothing more than thought, and You (the real You) cannot be thought. Thought comes and goes, yet there is still a sense of beingness/existence when thought is not arising, is there not? Simply notice this for yourself. You must be that which is always here, and what is always here is awareness. Even when ego abates awareness remains, and awareness is what you actually are.
Ego can be thought of as a dream character. When you dream at night all of the characters seem very real and separate from 'you'. Yet, when you wake up you realize that it was all simply a dream, an illusion that arose out of yourself. There were no separate characters because all of those characters, things, and events within the nighttime dream came out of your own consciousness - it was all one, and that oneness arose out of consciousness; no separation whatsoever.
Similarly, our daytime idea of who we are arises out of awareness; it isn't actually real, it is only thought and thought constantly changes. But it is this thought that seems to separate you from everything else. As soon as thought creates an identity called 'me' it automatically creates 'other'. This separation is not real, only apparent. Were it not for thought there would be no separation.
It is only in this ficticious separation that ideas arise which ego clings to or resists. Among these ideas are created 'missions' for the ego to seek out and fulfill. If ego did not arise no such 'mission' could be created. Without the ego there is no separation, only oneness. You are that in which all else arises - pure awareness. Everything you perceive is a manifestation of awareness/You - no separation at all.
Perceived separation is the foundation of all fears, which only arise from egoic thinking. Ego's driving force is fear: fear of failure/success, fear of how others think of you, fear of physical death/harm, fear of 'other', and the black diamond of all fears - the fear that it does not exist. But when searched for the ego can't be found, only awareness. How can you be something which when searched for cannot be found?
Ask yourself, 'Who am I', or better yet 'What am I?' and actually investigate and see if you can find an answer to this outside of awareness itself. This question redirects awareness onto itself and reveals that what you really are is eternal and unchanging awareness, and out of that awareness all else arises. Because of that awareness ideas of self may arise, but those ideas are always changing. Can you 'be' something that changes? Only an ego will adjust its ideas of self based on new or discarded information. Yet, even when it does so there will be an underlying sense of nonchange beneath those ideas which it holds. That nonchanging something is what you are, but because it doesn't change it get overlooked by the ego/mind. Ego/mind is usually directed on 'outside' events, but when awareness is turned inward awareness itself is revealed.
At some point all thought will cease, yet there will still be a sense of 'knowingness' without an object to be known. This knowingness is awareness itself, and that's what you really are. Then you will realize that ideas of separation are just that - ideas. Ideas which ego uses to keep itself separate from everything else, and which keep you bound in delusion.
So, in reality, separation does not exist; and if there is no separation then there can be no fear.
I hope this clarifies things a bit for you.
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Here is a followup post to this:
All you have are questions now - this is good, because now you can question all of your assumptions, which most people never do. The most basic assumption you or anybody has is that you, as a separate entity, exist apart from everything and everyone else. Since this is 'your' life then the first and only question that needs to be asked is, 'Who am I?' Who is this 'me' that everything seems to be happening to? You have assumed for most of your life that you have existed, but do you really? Investigate directly and see for yourself. Is there a separate entity or only an idea of a separate entity which arises out of awareness?
How to be happy? By living life from the natural state of awareness rather than identifying with the ego. The natural state is one of fulfillment and happiness - there is nothing that needs to be added or taken away for happiness and fulfillment. The ego thinks that by accumulating more knowledge, power, possessions, special abilities, performing good works, and so forth that happiness will be the result.
The irony is that literally nothing 'needs' to be done because happiness/peace/contentment/fulfillment are yours by nature; it's just that they are obscured by ego identification. Tolle calls it the noisy mind, but it's not so much the noise as the identification with that noise. When ego identification is severed the natural state is automatically revealed, and then it is seen (by no one) that nothing needs to be done. The noisy mind will quiet on its own when there is no more identification with it. This is what happened to Tolle during that pivotal night - there was a sudden disidentification with ego. For most people the disidentification is gradual.
Tolle's portals are ways of directing attention away from ego and onto awareness itself. It's not that ego is the enemy and needs to be destroyed, it's just that ego gets in the way of consciously seeing one's true nature. Ego will fight for its life when it feels threatened and it will employ every trick it can think of to remain in control. This is where it can become very subtle in its attempts to stay in charge. For example: it will hear about enlightenment and so it will pursue it eagerly - enlightenment becomes a goal, a mission to be fulfilled, and all sorts of practices will ensue - meditation seems to be chief among them. But this is a trap because the very performance of any sort of practice or technique will keep ego engaged. In other words, ego is trying to get rid of itself (for that is what enlightenment is, egoless awareness), which is impossible! A 'spiritualized ego' is the greatest barrier to enlightenment.
It is ego which gets caught up in thinking (which it doesn't 'do' - thoughts simply arise out of awareness on their own and then are identified with by the ego) and the storyline it has created for itself. It is this seemingly endless identification which is the cause of unhappiness and suffering.
In truth you are already enlightened but you don't realize it yet. With the discovery that you aren't ego/mind by directly seeing this truth enlightenment is automatically revealed, and thus, there is a resting in the natural state, whose nature is that of stillness, happiness, peace, and fulfillment. Once ego identification is broken the egoic structure begins to crumble and the natural state becomes consciously experienced for greater and greater lengths of 'time'. Then, when thoughts and ego arise again (as they will) they are no longer believed in as being true and so they lose their ability to sway you one way or the other.
Tolle's words are helpful pointers to this natural state. I would especially recommend listening to Stillness Speaks because he draws you into this natural state of awareness (I would recommend doing this while at home at first, so there are no distractions to draw your attention away). There is nothing you HAVE to do to get there, however, but listening to him can spontaneously lead you back to Your Self as pure awareness. Once you recognize (re-cognize) what it is you will see how simple it all is and it will become easier to return there/here. Then you will laugh at yourself and all of the 'gymnastics' that you previously used to get something that you already had!
This is all a great joke, a great play that consciousness is putting on for itself. There is nobody here! There is nobody doing anything! Pure consciousness is doing everything! You are now waking up and getting the punchline of this joke. By the way, this doesn't make you better than anyone else (that would be egoic thinking), it just wakes you up to what it is you really are.
