Secret of being Happy and Peaceful

The teachings of the Buddha can be best summarised by the words of Buddha himself:          

Avoid wrongdoing, Do good and Purify the mind,

This is the teaching of Buddhas.~ Dhammapada 183

Buddhism teaches us how to overcome our problems and difficulties by understanding and preventing their causes.  Whereas we usually look to outward circumstances for the causes of our problems, Buddhism teaches us to look inwards. Buddha showed how our feelings of dissatisfaction arise from negative states of mind - primarily anger, attachment, and ignorance - and offered methods to eliminate these by developing generosity, compassion, wisdom and other positive states of mind.

Inner Peace - the real source of happiness

Buddhism teaches people that the real source of happiness is inner peace. If our mind is peaceful, we shall be happy all the time, regardless of external conditions, but if it is disturbed or troubled in any way, we shall never be happy, no matter how good our external conditions may be. External conditions can only make us happy if our mind is peaceful. We can understand this through our own experience. For instance, even if we are in the most beautiful surroundings and have everything we need, the moment we get angry any happiness we may have disappears. This is because anger has destroyed our inner peace.

"Mind precedes all things; mind is their chief, mind is their maker.
If one speaks or does a deed with a mind that is pure within,
happiness then follows along like a never departing shadow.
~ Dhammapada 1"

We can see from this that if we want true, lasting happiness we need to develop and maintain a special experience of inner peace. The only way we can do this is by training our mind through spiritual practice - gradually reducing and eliminating our negative, disturbed states of mind and replacing them with positive, peaceful states.

Meditation - the method for controlling the mind

Buddhism teaches that meditation is the method by which people can achieve inner peace. Meditation is a method for acquainting our mind with thoughts and feelings that are conducive to peace and happiness. When our mind is peaceful we are from worries and mental discomfort, and we experience true happiness. There are many lines of thought and feelings that Buddhists use as objects of meditation. These include love and compassion as well as special lines of reasoning that enable us to overcome negative states of mind such as self-centredness and having a biased attitude towards others. A very simple meditation used by nearly all Buddhists is breathing meditation. In this meditation we simply take the sensation of our breath as our object of meditation. Although it is only an introductory meditation, even this meditation can lead us to experiences of real inner peace and tranquillity.

Bringing peace and happiness to a troubled world - the ultimate aim of Buddhism

Some people may believe that Buddhism is rather selfish because it seems to be concentrating only on inner peace. This is not the case, however; Buddha’s main purpose in teaching people how they could achieve inner peace was so that they could then go on to share that experience with others. Buddhism teaches that this is the most effective way in which it is possible for them to benefit others.

Entangled by the bonds of hate, he who seeks his own happiness
by inflicting pain on others, is never delivered from hatred.
~ Dhammapada 291"

Buddhists understand that without inner peace outer peace is impossible. We all wish for world peace, but world peace will never be achieved unless people first establish peace within their own minds. Only by creating peace within our own mind and helping others to do the same can we hope to achieve peace in this world. 

Source: http://www.parami.org/buddhistanswers/buddhists_happy.htm