This is a pure myth, so some of the ladyboys do not believe it, but most of them do. Knowing that Thailand is a Buddhist country with 80 percent of the population practising Buddhism. Their belief somehow contributed to some of the ladyboys explanation why they existed. And this is one of the most amazing fact about ladyboys that we encountered while our stay in Thailand.
Reincarnation. Yes, they believe in reincarnation and them being as a sao prhaphet song Thai: สาวประเภทสอง (local term for transgender women) and they commonly translated it as ladyboy, is as simple as reincarnation. Ladyboys in Thailand believe that they are being punished because they were bad people in their previous lives. And as ladyboy they need to be good in there new life. They need to do good things because they considered being a ladyboy as a second life.
And because some consider reincarnation a punishment. The community tends to be more considerate and respectable towards ladyboys. They do not wish to give more burden to the lives of ladyboys because there punishment is heavy enough to carry. Which could be the possible explanation that ladyboys in Thailand are very well accepted and tolerated, although they are not legally recognised and protected.
I am pretty much sure that in modern Thailand, this idea is not believe to be a good basis of explaining the existence of transgender women specifically in Thailand And not to mention the world is now moving to a more scientific approach in explaining almost everything. After all the said belief is a myth and it will remain a myth.
But few of the people still believe in it. After all they have been very kind to transgender women here in Thailand. It is not politically acceptable to define transgender people in Thailand with simple myths. However, myths somehow contribute to how people see gender. How they are very open to transgender women to the point that it is not new and it is part of culture. I believe this is one of the few things that makes Thailand amazing and gives so much freedom to transgender women to become who they are.