1) The first level, Happiness 1, is physical pleasure and possession of material things. Level 1 is all about gaining physical gratification through fulfillment of the five senses. This level of happiness is good. Without taking care of our physical needs, we would eventually die. But, human beings can make the mistake of choosing Happiness 1 as their "end" (goal). We can believe that physical pleasure and the possession of material things is the most important thing about life, and is what makes life worth living. If we do this, we quickly become bored. We lose a sense of self-esteem. We feel like we are living beneath ourselves. We are not happy. And when we suffer, we believe that suffering is meaningless.
2) Happiness 2 is ego-gratification. This is the kind of happiness that comes not just from feeling good, but from feeling good about ourselves. We get a boost of ego when we are successful, powerful, in control, admired, popular, or when we win competitions.
This level of happiness is also good. We need to love ourselves before we can give ourselves away in love to others. But human beings can make the mistake of choosing Happiness 2 as their "end." This will inevitably lead to jealousy, aggression, fear of losing, suspicion, anxiety, ego-sensitivity, and even anger at God when we are not winning. We are not happy. And if our suffering causes us to lose some control or become dependent on others, we begin to think that suffering is useless.
3) Happiness 3 is contribution to others. This is the happiness that comes from making a difference to other people. It's the joy we get from doing what is right and good. We are happy when we know we have been honest, fair, loving, caring, compassionate, patient, humble, and good. We know that we have helped to make the world better for others.
Happiness 3 is wonderful! But if we make it our "end," we quickly become frustrated. Human beings want unconditional Love. We want perfect Fairness, absolute Truth, and infinite Goodness. And want these things to exist forever. But the human community is not perfect. We make mistakes. We have limitations. We die. When we see innocent people suffer, we begin to believe that life is cruel.
4) Happiness 4 is faith and participation in the unconditional love of God. It is believing that there is such a thing as perfect, absolute, ultimate, infinite, unconditional, and eternal Truth, Love, Goodness, and Justice. It is learning that these things can only be found in God, and that God loves us so much, that He wants us to be a part of that Love forever. If we truly believe that this is our "telos," our end, then we know what it means to be human.
A human being is a physical and spiritual being, created by God, whose final goal is to find happiness by accepting the perfectly unconditional love of God for all eternity, and by giving ourselves away in love to others (even when this requires suffering).
Source: Life principles