People are, by and large, happy when they are giving up themselves for something bigger than they are. Jesus spoke about such happiness in the beatitudes: Blessed are the poor in spirit, for theirs is the Kingdom of God. Blessed are they that mourn, for they will be comforted. Blessed are the peacemakers, for they will be called the sons of God (see Matthew 5:3-12).
There are many degrees of happiness, but the greatest happiness comes from serving God, knowing Him, and knowing for certain that your life is contributing, in a positive fashion, to His ultimate purposes. I think that is the greatest happiness a person can have.
People who do not know God will never find lasting happiness. They may achieve a transitory type of happiness, but it will be shattered whenever unpleasant events come. A man may say, “I am very happy, because I have a lovely wife, healthy children, a nice home, and a good job.” But what happens if he loses his job, his house is repossessed by the finance company, his wife leaves him, or one of his children becomes sick? What becomes of his happiness then?
If you are fellowshipping with God and serving Him, peace and happiness will be there despite the circumstances. You can be happy in the midst of problems.