It was not until someone asked me the same question did I actually wonder about it - is egotism different from egoism? What is the difference between egoist and egotist? As I read more and more about it, I realized the exact difference between the two very similar concepts. Both the concepts are to do with 'ego', or the self. They are both characterized by a concern for the self, and a tendency to cater to the self. But one of them is vain, self-indulging and borders on narcissism; while the other is more a sense of self, a sense of awareness of the self, a meaning of the self as what spirituality and philosophy talk about. For someone who is not very familiar with the latter sense of the word, egoism and egotism could well mean the same; but it would be a fatal mistake on part of the person if he considered both the same.
Egotism - the Narcissistic Version of the Self
Egotism is in fact the correct word to describe egoism in the sense or connotation that we use it in. When we call someone egoistic, we in fact mean to say that the person is full of him/herself, thinks only (or mostly) selfishly and can become spiteful if he/she does not get what he/she want. But the correct word we should be using in this case is 'egotism'; and such a person should be called an egotist. However, egotism goes far and beyond being only selfish. Egotism is also marked by a heightened or exaggerated sense of one's abilities, capabilities, intelligence, intellect, beauty etc. An egotist usually has a high self-esteem and thinks he/she is better than most people around him/her. They think of themselves as close to perfect. Though it is good to have a positive opinion about yourself, it can in fact be quite repulsive if someone is full of him/herself.
Egotism, if left un-curbed and un-checked, can quickly turn into narcissism. Narcissism (in the usual context in which we use it) refers to a magnified and often vain high opinion of oneself. Narcissus, a character from Greek mythology, is believed to have died by the side of a pool, staring at his own reflection that he had fallen in love with. To be so in love with yourself that you deny everything else... it is quite a scary prospect, isn't it?
Egoism - the Not-So-Selfish Version of the Self
Egoism has a meaning that is quite close to egotism, but with one major difference. Egotism is marked by pursuits to increase your own importance with an already high opinion of yourself. Egoism, however, lacks the later. Egoists are people who are motivated to perform acts, deeds only (or mostly) by their own needs and desires. They are driven by their own wants, and almost everything they do is to serve or cater to their own expectations. In this sense, they are selfish. However, an egoist need not always have an inflated self-opinion. They are not people who have an inflated image of their worth in their minds. In this sense, they are easier to deal with than egotist people.
This is also the reason egoism can be looked at in a positive sense as well. One should and must cater to one's own needs, strive to better oneself, and aim towards achieving one's dreams and goals. But it is when people do this at the cost of someone else's respect or happiness that they become egoists. While an egotist has little or no regard of the people around him/her and their achievements, an egoist is simply too busy working on or for him/herself to have the time to think about other people! In a sense this is a good thing; the fact that you are incessantly urging yourself to do better in life and to be a better person. But we need people around us to celebrate happiness, to share success, to turn to for comfort, reassurance when we falter or fail; and that is why one should regard those around him as well.
More on Egoism...
Egoism has been divided into different types. Ethical egoism is when one acts in one's interest, to cater to one's needs. This we all should do - no one is going to do things for you, you have to help yourself! This aspect of egoism is in connection with ethical altruism (one should always strive to serve other people) and utilitarianism (one should strive for the benefit and well-being of the society one is a part of). All three are necessary, in my opinion. You cannot be entirely altruistic, for it is never nice to be too nice to people. You should not be entirely egoistic either, for then you are always at the risk of becoming an egotist. Utilitarianism can become a reality only if the people who make up the society are themselves good human beings (which requires you work on yourself, be an egoist) and if they help other people who are part of the society too (which calls for one to behave altruistically). Hence all three are necessary. Psychological egoism, on the other hand, indicates individuals who can act only in self-interest, without regarding other people. Such is the nature of psychological egoists that even if they help someone out, it is still an act of selfishness for they do it to elevate their own image in their mind or in the mind of the person they helped; or then they expect something in return.
Ego Ideal - a Balance Between the Two
Personally I think the concept of ego ideal is what 'ego' should mean to everybody. Ego ideal is your image of 'you' that you always strive to achieve through all your pursuits throughout life. It is, as I like to say, a constructive force. If your head is on your shoulders and you have your heart in the right place, an ego ideal can guide you to become a better person in life. It can be the hand that chips at you and sculpts you into a person who thinks about him/herself and is yet rational, logical, compassionate and altruistic when times call for it.
In the end, I think what matters the most is what your intentions behind your actions are and if what you do is going to prove to be negative to anyone in any sense. One may tend to feel burdened by the prospect that no matter how carefully one puts one foot forward after another, one may still end up hurting someone. But if you closely listen to your instincts, it will become easy for you. Cooperation, altruism, selflessness are too deep rooted in us to fail to guide us. If doing something feels wrong, you are definitely suppressing your inner voice. Don't do it; you are only paving the path for great distress. Let your conscience forever guide you, and I am sure you will become a gem of a person!