Acharya Prashant explains the fundamental difference between self-esteem and self-respect. He clarifies that the word 'esteem' shares its root with 'estimation,' which implies a rough, approximate, and often inaccurate measurement used when one lacks direct knowledge. Self-esteem is essentially a self-image built upon the opinions and labels provided by others. Because it is borrowed from the external world, it is static, unreliable, and makes an individual dependent on others' validation. He illustrates this by showing how people estimate time when they lack a watch, whereas those with direct access to a clock provide the exact truth. Relying on self-esteem is dangerous because if others can build your image, they can also destroy it, leading to inevitable suffering.