Is it better to underestimate or overestimate your abilities?

Undeceive the self.

Do not regard your abilities at all. Take every opportunity to be a more full self.

Modern living makes mediocrity easy living. If that’s fine for you, you will be in good company.

If you truly want to reach your “full potential” comfort, convenience, and congratulations are your enemy. Do things the hard way and for your own reasons, and you will then know the accomplishment as your own.

There is a level at which your skills and abilities will resonate. You should aim to be at this level. Of course you should rise above jobs that are too easy. But also do not try to become someone you are not. You'll just burn out. Being at the right level will allow you to be the most productive, resulting in more value for your employer/clients and then it is up to you to negotiate that into a higher income.

Nurture your skills, but ensure your weaknesses don’t hold you back. And work hard to find blind spots. Everyone can see the happy path. Being able to see and avoid bad outcomes is usually more valuable than raw skill.

You're going to need to be comfortable with both.

They're just estimates so they can never be completely correct.

You need to be able to deal with it either way.

Regardless it's usually best to consistently underpromise and overdeliver.

I like a mix of both? Overestimate for resting/hobby dream time (motivation building for task momentum), underestimate for pragmatic planning to reach your dreams (execution for sustainable effort).

The world heavily incentivizes and rewards overconfidence.