Srila Prabhupada explains in this quote how the living entity forgets his eternal self and identifies with the material body.
Unless a living entity forgets his real identity, it is impossible for him to live in the material conditions of life. Therefore the first condition of material existence is forgetfulness of one's real identity. And by forgetting one's real identity, one is sure to be afraid of death, although a pure living soul is deathless and birthless. This false identification with material nature is the cause of false ownership of things which are offered by the arrangement of superior control. All material resources are offered to the living entity for his peaceful living and for the discharge of the duties of self-realization in conditioned life. But due to false identification, the conditioned soul becomes entrapped by the sense of false ownership of the property of the Supreme Lord.
(SB 3.12.2)
