Artists work with paint; sculptors with marble - the good man works with his mind.
"The raw material of the good man is his mind - his goal being to respond to impressions the way nature intended" (verse 1).
Furthermore, "the soul will never reject a clear impression of good" and "the good is preferred over every human association."
"If we locate the good in soundness of character, then it becomes good to maintain [relationships we have with people]" (verse 8).
Although your father or brother may waste your inheritance, you must ask if they will take their "greater share of honest, loyalty, and brotherly love." It's absurd to think they can take more of these things! Therein lies the answer to "what is good?" Virtue is the sole good! And you can get this from yourself! You don't have to compete with others for it. You don't have to wait on it; you don't have to pay for it - rather, you simply have to make it your 'guiding star' - the center of your world-view and paradigm. Your "currency" is virtue it's what makes you tick.
Others' currency can be found by 'flashing' it in front of them. If he is guided by money, then he can be paid off with coins. If it is food, then delicious food. It is the god he worships.
"Here is the primary means of training yourself: as soon as you leave in the morning, subject whatever you see or hear to close study. Then formulate answers as if they were posing questions. Today what did you see - some beautiful woman or handsome man? Test them by your rule - does their beauty have any bearing on your character? If not, forget them. What else did you see? Someone mourning for the death of a child? Apply your rule. Death too is indifferent, so dismiss it from your mind. A consul crossed your path; apply your rule. What category of thing is a consulship - a good of the mind or one of matter? If it's the latter, then out with it, it failed our test. It is nothing to you, reject it. Now, if we continued to practice this discipline every day from morning to night, we would see some results, by God" (verses 14-16).
We must watch for, what Epictetus calls, "insidious opinions" (verse 18). They are insidious because they erode the most sovereign and absolute philosophical concepts: virtue is the sole good and it can be found from within by the working of our own will.
Some examples of insidious opinions: you see a person mourning and you think "she's crushed." Rather think, it is nothing to me - it's indifferent and this person could be content if they did not desire to find happiness in others. You see a rich man or woman and you think "There goes one lucky man!" Rather think, money does not make one happy nor lucky! You see a poor beggar and you think "poor guy, he doesn't even have money enough for food." Rather think, this beggar, despite his predicament, could find contentment. Indeed, this is hard for some to accept or live by. But as long as people, like these, try to find contentment in things that lie outside themselves (externals), they will be frustrated and experience fear and anxiety.
He finishes the chapter with an allegory. "The soul is like a bowl of water, with the soul's impressions like the rays of light that strike the water. Now, if the water is disturbed, the light appears to be disturbed together with it - though of course it is not. So when someone loses consciousness, it is not the person's knowledge and virtues that are impaired, it is the breath that contains them. Once the breath returns to normal, knowledge and the virtues are restored to normal also."