Nick Powdthavee is an economist at England’s University of York. “The Happiness Equation” (247 pages) is his attempt to expound on the latest research on happiness. Here is the CliffsNotes version:

– Personality: Massively important

– Friends and Family: Important

– Money: Not so important

Beware the “Focusing Illusion”: When asked about something (new job, vacation, raise, new toy) we tend to overrate its impact on our happiness. Truth of the matter is, the impact of even extremely bad things (divorce) or extremely good things (winning the lottery) tend to dissipate within a year or two and we return to our base level of happiness. Indeed, research shows the extremely wealthy “don’t change their activities very much and even tend to be slightly more stressed.”

Once beyond absolute poverty, money has little impact upon happiness. Our happiness is much more dependent on our internal state of mind than our external conditions. As Abe Lincoln said, “Most folks are about as happy as they make up their minds to be.” Cognitive behavior techniques, such as counting your blessings daily, developing an attitude of gratitude, deliberately choosing to focus on the good in your life and what you can control, will bring you much more contentment and life satisfaction than a new house or car or promotion or raise.