Part 1:The happiest people surround themselves with family and friends, don't care about keeping up with the Joneses next door, lose themselves in daily activities and, most important, forgive easily.

Now a burgeoning "positive psychology" movement that emphasizes people's strengths and talents instead of their weaknesses is rapidly closing the gap, says University of Pennsylvania psychologist Martin E.P. Seligman, author of the new book, Authentic Happiness.

The happiest people spend the least time alone. They pursue personal growth and intimacy; they judge themselves by their own yardsticks, never against what others do or have.

"Materialism is toxic for happiness," says University of Illinois psychologist Ed Diener. Even rich materialists aren't as happy as those who care less about getting and spending.

Because the December holidays are friend- and family-oriented, they painfully reveal the intimacy missing in some lives, Diener says.

Add in the commercial emphasis--keeping up with the Joneses and the Christmas enjoyed by the Joneses' kids--"and it's a setup for disappointment," he says.

Life satisfaction occurs most often when people are engaged in absorbing activities that cause them to forget themselves, lose track of time and stop worrying. "Flow" is the term Claremont Graduate University psychologist Mihaly Csikszentmihalyi (pronounced cheeks-sent-mee-hi) coined to describe this phenomenon.

People in flow may be sewing up a storm, doing brain surgery, playing a musical instrument or working a hard puzzle with their child. The impact is the same: a life of many activities in flow is likely to be a life of great satisfaction, Csikszentmihalyi says.

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