Selecting a narrative from the ledger of reality

I first heard of “selective hearing” when someone told me an anecdote about an old man. The old man would sit in his armchair watching television, and his wife would talk. But the old man wouldn’t hear all of his wife’s words. He would only hear what he wanted to hear. He was deaf to her worries, insults and attempts at conversation, but he would respond immediately when his wife said dinner was ready. Unfortunately, selective hearing is not unique to grumpy old men. It’s an ability we all possess and nurture. To demonstrate how, consider the following:
The unbroken line represents reality, the immutable historical record of our life and actions. The green circles are the points which someone with an optimistic view of themselves would opt to remember. The red circles are the points which someone with a pessimistic perspective of themselves would preserve. Separated out, we are left with three different interpretations of the same life: everything that happens, a positive interpretation of everything that happens, and a negative interpretation of the same.

Seen like this, reality is a ledger containing every act and thought, and the narratives we live by arise from the selective preservation of certain entries. Or, alternatively, from the raw data set of reality we choose only the points that conform with the image we have of ourselves and the world.