How do people overestimate themselves?

Everyone is possible to overestimate or underestimate himself/herself, actually it always happens. The most classical example is gym membership. Although nowadays there are some gyms that offer the pay-as-you-go option, many people will still find gym yearly membership more attractive. What makes people overestimate their abilities? Membership and subscription are influenced by the discount rates and the decisions made depend on the expected discount rates. When people overestimate their abilities, their expect discount rates are lower than the actual discount rates. It always happen and I think some people may know this fact but still overestimate their abilities. Why? Here is purely my hypothesis. Individual expected discount rate of his/her ability is normally a constant, does not change over time; however, the actual discount rate is normally a strictly increasing function. Individuals usually assume that the effects of risk facts do not change. For example, we may consider running 2km per day this year can make ourselves as healthy as if we run 2km per day next year; however, according to this assumption, the effect of running 2km per day at the age of 18 is the same as the effect at the age of 80, which is not true in reality. Therefore, people's expectations are usually roughly right about some short-term events, but are much more imprecise and further from the actual facts when we are making decisions about long-term issues.