One weekend, while relaxing with his wife, Carol, in their ski chalet, a three-story house in the mountains east of Seattle, Greg James had a revelation. At age 44, the founder of Topics Entertainment -- an educational software developer in Renton, Wash. -- had personally raked in more than $1 million a year for a decade. In that time, he had built a successful business and a comfortable life for Carol, himself, and his three young children. Besides the ski chalet, he had been able to purchase a beautiful four-bedroom home, a 46-foot yacht, and five automobiles, including a Ferrari and a Mercedes convertible. But, in this quiet moment of introspection, James realized that something was missing.

Psychologists have long suggested that finding happiness is much more than just the sum of enjoyable experiences. Many psychologists believe that entrepreneurs -- Greg James's example notwithstanding -- have a greater potential for happiness than the average person. That's because they can set challenges for themselves in their jobs that best suit their own skills and goals, explains Mihaly Csikszentmihalyi, a psychology professor at Claremont University and author of Good Business: Leadership, Flow, and the Making of Meaning. "Clearly," he writes, "entrepreneurial leaders find as much satisfaction in their jobs as any person can hope to achieve." For entrepreneurs, this sort of job satisfaction carries a lot of weight, says Kelly Shaver, a William & Mary psychology professor. He has found that it's often the sense of accomplishment that makes an entrepreneur truly happy in life -- not the monetary rewards those accomplishments bring.

James says he was never that interested in making big bucks. A former documentary film producer, he started his company -- originally an educational-film distributor -- as a "fun project between gigs." But when the company switched from distributing film to software, revenue skyrocketed, and he started buying stuff. Eventually, James began to realize that these things distracted him from what really mattered. "A bigger house just means more maintenance," he says. "You wind up spending more time taking care of your stuff and less time hiking with your kids."

In his book Authentic Happiness, noted psychologist Martin Seligman examines the distinction between pleasure and gratification. While pleasures (like a delicious meal or a drive in a nice car) bring only fleeting happiness that lessens in intensity over time, he argues that gratification is a longer-lasting joy that requires skill and effort and "can only be had by activity consonant with noble purpose."

In other words, says Csikszentmihalyi, to achieve happiness, you must enjoy doing your best while contributing to something beyond yourself. This can take many forms. To set goals that will be meaningful to you, he says, you must begin by defining your priorities -- the things you believe make life worth living.

That's basically what James ended up doing after his epiphany in the ski chalet. A longtime member of groups like the Sierra Club, he decided to devote time to environmental causes and make some changes in his lifestyle. He sold two cars and the yacht, and invested in 3,000 acres of land in Washington for a nature preserve. At the office, he began rewarding employees for improving the fuel efficiency of their own cars and for carpooling. And last year his company contributed close to $400,000 to environmental nonprofits.

James, now 47, also reports that he spends more time with his children than before. It would seem that he's living proof that happiness can be found in the difference between what Seligman calls a pleasant life and a meaningful one.