The subject I've researched the most and written about the least is the happiness. Instead of putting off the version of this that reads like a research paper with sources cited and so on, I will just tell you a rambling story. And for full disclosure, my own level of happiness from 1 to 10 is about a 7. I am currently below the US's average answer of 7.4. (Note that Switzerland, Iceland, and Denmark are all above 8.0 averages).
A Crash Course in Happiness
For 100 years, the field of psychology was concerned with fixing problems in people, and the study of "happiness" was considered not a topic worthy of study. You couldn't even say the word happiness in an academic paper, you instead needed a jargony term: "positive affect." In more recent times, we now know that happiness is NOT the absence of misery. The absence of misery is being kind of neutral at best. People who have misery can simultaneously be very happy, even (more on that in a bit). The point is, even though last century's psychology was highly successful at curing various mental ailments, we now know that actual happiness requires more than that.
Happiness is in many ways a trap. It's evolutionary biology's way of making sure we keep going, and keep seeking. That is why happiness is so elusive; by its very design in our brains, it's something out there beyond our reach, something to strive for. Those of our ancient ancestors that were completely satisfied with what they had were less likely to go over that next hill in search of the greener grass and more resources, and thus less likely to win the competition of survival of the fittest.
Money is a big trap for many. One of the most consistent findings in this field is that money has zero correlation to happiness, except for the poorest people in the world. If getting more money will help you meet your basic biological needs for food, water, and shelter, then yes it will make you more happy. Beyond that, it won't, but it damned sure seems like it would, doesn't it? There's a corollary here that is especially relevant to American culture. Americans tend to work more hours than workers in other countries. Let's say you make enough money that you live comfortably. You get an opportunity for a promotion at work which means more responsibility, more hours, and more money. We are conditioned to believe this is a no-brainer of a choice: of course you take the promotion because more money is more happiness. But it isn't. If the job would be more personally fulfilling to you APART from the money, it could increase your happiness. But if it's not, then you're trading away more of your personal time in exchange for money that won't make you happier. You'd actually be happier if you worked LESS, rather than more, if it's a job that you aren't passionate about.
More money lets you buy more material goods. A new TV would be nice. And a new clothes. And a new car, and so on. When you get that awesome new TV, the awesomeness of it wears off after a short time. You are going to be very bad at predicting that ahead of time (we all are). You're bad at predicting how much happier the TV will make you and for how long, at how a political election will affect your happiness, at how the death of a family member will affect you, your favorite sports team losing, winning the lottery, and just about anything else. In all these cases, the feeling you predict may very well become real, but it lasts a much shorter time than you would expect. The TV becomes just another thing very quickly. You bounce back from the death of a loved one, even if takes a month or a year, but when it happens the sadness seems like it will be permanent. One study compares the happiness levels of people who won the lottery with people who became paraplegics (can't use their legs) because of an accident. Although right after these events, the happiness levels are what you would expect, after one or two years they level out to be exactly the same across both groups. Yes, really.
The term "hedonic treadmill" is what psychologists use when talking about the process of getting used to things, so their effect dies out. Yeah that TV is cool, but now I need a new boat. And the boat is cool, but now I need an airship. The same hedonic treadmill process that happens with material goods happens with sensations as well. Sometimes you really want chocolate or sex or food, but these wants are fleeting. It feels like if only you had those things, you'd be happy, then you get them and you aren't. These sensation-based desires are collectively called "pleasures," and it's another trap to think that if only your life had more pleasures, you'd be happier. I know it seems true. It seems true to me even, but the research is in, and the answer is no.
The study of happiness sometimes compares the different reactions of people to objectively the same situation. For example, if two people each lose $100 in gambling, even if their level of wealth is similar, they could have wildly different reactions. Some people who have terrible life situations are, for some reason, happier than those who seem to have advantages in basically every category. It was this phenomenon that Mihály Csíkszentmihályi noticed in concentration camps. Some people remained happy despite the terrible life situation they were in. This prompted his study of what we now call "flow." Flow is a sense of total engagement in some activity. It can be an intense activity such as mountain climbing, performing surgery, racing a motorcycle, or playing a sport at your peak performance. What surprised some is that it can also apply to almost any activity. You can experience flow in gardening, knitting, designing card games, or writing articles. It is the experience of being so engaged in a challenging activity that you are pushing yourself. You lose track of time and your brain's processing power has no room to spare to run the program known as "you," your ego. Instead, all self-consciousness fades away and there is only the activity. That is what zen archers mean when they say, "become one with the arrow." Professor Csíkszentmihályi found that even prisoners in a concentration camp were experiencing flow through mathematics, writing poetry, and other pursuits.
The happiness from the pleasures is fleeting, but the kind of happiness you get from flow is sustainable. Perhaps it's a lower intensity of "happiness" but at least professor Csíkszentmihályi says that there is strong correlation between overall happiness and the amount of flow activity a person participates in. That said, there is another layer on top of that. Imagine your job is to coordinate the routing of many passengers on trains across the country. It's a very difficult problem how to do this in an efficient way and you could certainly experience flow in working on such a task. I'm butchering the story by forgetting the name, but there was a man in Germany who had this exact job, and he loved the logistical challenge of it. Would the flow experience from a challenging job like this increase your overall happiness? What if I told you that the "passengers" were Jews who were to be executed in concentration camps? The math problem of optimizing transportation is the same either way, but with this new information, the job is likely to make you miserable. If the German gentlemen genuinely hated Jews and believed they should die, it probably would have been a very fulfilling job. (Yes it's terrible, I'm just saying.) The point is that ONLY looking at whether you are participating in flow activities does not tell the whole story. If the activity also expresses and aligns with your personal values, it triggers a deeper kind of happiness that Martin Seligman, past president of the American Psychological Association, calls "Authentic Happiness."
Seligman also talks about a person's biological set point of happiness. That's the level you are kind of hardwired to return to. Some people have higher set points than others. Whatever that level is for you, after you win the lottery and wait a while, you'll probably get back to it. After you lose the use of your legs and wait a while, you'll probably return to it. After you get a promotion, or break up with your girlfriend, etc, etc. This lines up with the concept of the hedonic treadmill that we talked about earlier, and leads to a curious thing: the best judge of how happy you will be in the future is how happy you are right now. In one study of nuns, their happiness levels were tracked and compared. It's a great type of environment for a case study because the lifestyles of the nuns are all the same. They eat the same food, live in the same surroundings, perform the same activities, and so on. In the search to find correlations, there were two strong ones found: 1) The happier a nun was, the longer she lived and the healthier she was and 2) the best predictor of how happy any particular nun was to look at the content of the essay she wrote when she first became a nun and score it for positive-outlook language. In other words, the ones who were happy at 18 were happy several decades later, and the ones who weren't, weren't.
That's also pretty grim. It sounds like there's nothing you can do, but even Seligman says there is. There is a range that surrounds your natural set point and you can be at the bottom of it or the top of it depending on the life choices you make. You can affect that level to an extent. Some believe you can go even beyond the point or two surrounding your natural set point, though doing so would be very difficult.
Creators and Makers
There are times in my life when objectively speaking, I was doing very well. I had just accomplished whatever thing I had worked hard on. I don't know if any of those things ever made me happy. I am always thinking about what could be better, what the next version should be, or what the next project should be. This sort of reminds me of an experiment that actor Alan Alda showed on his show Scientific American Frontiers. In one episode, he visited a lab that was studying how people react to things that are "cool" or "not cool." They hooked him up to a brain scanner and showed him a series of pictures of various consumer items. Some sunglasses, some pants, an iPod, a car, some laundry detergent, and so on. He rated how cool or uncool each one was. The real point of the test was actually to see which parts of the brain light up to cool things, and which part to uncool. The researchers found that those who were considered fashionable people had different reactions from the rest. One group's brains really lit up when they saw COOL things, but had a more mildly negative reaction to uncool. The other group's brains lit up to UNCOOL, but had a more mild reaction too cool things. Perhaps surprisingly (?), it was the fashionable people who had the more mild reaction to cool. They just really hate uncool stuff.
I am not fashionable at all, but I think the same thing applies to makers and creators. In my work, I am constantly annoyed by the things that aren't right. If some drop shadow on a corner of something is the wrong kind of shadow, I just can't stand it. The strength of my negative reaction to a slightly wrong dropshadow is stronger than my positive reaction to the best looking things I've created. Yeah of course it's important to know what is cool and to put that into product (and art, etc), but I think it's the lot in life of creators to be the types who are constantly unsatisfied. Being constantly unsatisfied is the impetus to fix things and make better and better things. 10 out of 10 happiness seems incongruous with such a pursuit.
What Actually Helps?
Some things actually do affect your happiness level. Friends, family, and a sense of belongingness affect it. Those things lead to higher levels of oxytocin in your body, the same chemical you get from being physically touched (touched in a good way, that is). Forgiveness also helps. If you carry around hate for people, you are a hateful person. Gratitude helps too, because it counter-acts the hedonic treadmill. If I took the time to really think about the success of whatever my latest project is, to appreciate that and be consciously thankful for it, that counteracts the treadmill of thinking only about the next, next, next project. The same goes for gratitude toward people. Sincere gratitude is an overwhelming force, as Seligman's students well know (but that's another story). Autonomy also helps. That is, the ability to dictate what you will work on, how you will work on it, and when. If you can find a way to let your employees have more control over their piece of the puzzle, that usually leads to more happiness and more productivity.
Two girls I have known seem relevant to our discussion. I'll call them Mary and Penelope. They are each unusual, though in somewhat opposite ways.
Mary is unusual in that her biological set point of happiness seems to be at least 9, if not 10. I don't know if you know anyone like that and it might not be what you're thinking. There's that kind of fakey happiness that a salesman or Walmart greeter puts on, like a mask. Mary's happiness is actually genuine though. She views set backs as temporary things that can be overcome. She sees the best in people, and gives them the benefit of the doubt. She is easy-going in that she has an openness to experiences. If someone says, "Let's do thing X," others might say "but thing X sounds terrible," while Mary would say "ok!!!" She lets things happen, and enjoys whatever those things are. Her enjoyment probably makes you enjoy it too.
Penelope was dealt different cards in life. As a child, her grade school teachers treated her terribly and thought she was stupid. Actually, she was learning English as a second language at the time, and it was a language difficulty, not an intelligence difficulty. She probably felt isolated and inferior. She suffered other personal tragedies and I think she saw things that people shouldn't have to see. Later in life, she suffered from depression, and couldn't get out of bed some days. I think these are fairly shocking things, if you were ever to actually meet her. What you would find is a strong, confident woman who is the master of her own life. A woman with remarkable empathy, and yes, with happiness. The difference here is that she didn't come pre-packaged that way, she had to work at it with therapy, introspection, and effort. While Mary allows things to happen, Penelope calls the shots. She's in control, she gets what she wants, and I think that kind of autonomy is exhilarating to her.
Nature and nurture are both factors here, clearly. Your biological set point is an anchor, but not an immovable one. If you're going to make some changes, maybe don't shoot for a 10 though, or you might lose some of your drive.