The statement "You are God" seems an absurd and presumptuous blasphemy, so it needs to be clarified. According to the Vedic tradition and panentheism, it's not just you who are God; all of us are God. And it's not just all of us who are God; everything is God. God is the universe in synergy, the whole that is more than the sum of its parts.
This contradicts mainstream Western theology, which is based on a split between creator and creature. According to this view, God made the universe with us in it and is now observing our behavior, rewarding us or punishing us based on our obedience to His rules.
The religions of the East and the mystic traditions of the West have a different view: God became the universe, manifested it, is it. Rather than observing the universe, God lives it. The universe is God's active side, engaged in time, space, and matter. God is more than the universe, but there is nothing in it that isn't God.
But if it's true that we are God, why are we in such an ungodly mess? Because our unity with God is a living reality only in a higher state of consciousness. Reality, as Maharishi Mahesh Yogi said, is different in different states of consciousness. Ordinarily we experience three state of consciousness: deep sleep, dreaming, or waking. Each has its own reality with distinctive physiological parameters of brain waves, blood chemistry, and metabolic rate.
Waking state is the realm of duality. Here we are bound in the relativity of time, space, and matter, so we perceive separations between ourselves and others. In waking state the idea that we are God is nonsensical. It contradicts our perceptions.
But it's possible to experience a fourth state of consciousness that has its own reality and physiology. It's called transcendental consciousness because it's beyond the other three, existing at a more fundamental level. Here the duality and materiality of waking state are only surface conditions. The deeper underlying reality is unity, where the separations fade and everything, including matter, is experienced as one unified field of consciousness. Here your individual thinking mind merges with the mind of God. You're no longer just a part of God. You transcend the boundaries of your small self and expand into the one great Self, the divine spirit animating the universe. All separations between you and God disappear, and you become One.
In transcendental consciousness you really are God and you really are experiencing a sacred life. The most effective method I've found for achieving this state on a regular basis is Transcendental Meditation. But even with TM, it's usually a fleeting experience. In transcendental consciousness the mind is without thoughts. It reaches the source of thought, where it becomes pure Being -- alert and aware but without an object of awareness, consciousness experiencing itself. This state is so blissful, so all-encompassing, so divine, that we think, "How wonderful!" And as soon as we have that thought, we're no longer there.
But as we come out, we bring some of the energy, intelligence, and joy of this unified field back into our waking state of consciousness, where it enriches our life. And ironically, one of the ways it enriches it is by giving us a deeper appreciation of our separateness from God. The sense of separation we experience in waking state is a great aid to devotion. It's easier to love something external to us, even if this externality is only partially true.
Each experience of transcendental consciousness also heals our nervous system of stresses we've accumulated in the past. It is these stresses, or karma, that make our mind unable to stay in that state while we're thinking and acting. Once those stresses are gone, which usually takes many years, we function in that state permanently.
This is enlightenment, the height of human development in which our unity with God is a living reality, not just a concept. Then we live a sacred life, permanently perceiving the truth of the Veda: I am the Divine, You are the Divine, All this is the Divine.