A number of the translations render ‘esher (blessed) with the English word “happy”, but the word “blessed” is the better term. In modern use happy speaks more of a feeling. And in general feelings depend on our circumstances or on what happens. We’re generally happy if what happens to us is good. We’re not happy if what happens is bad. However that is not the promise of Psalm 1, which speaks more of one’s state or condition rather than one’s feeling. To be sure, the blessed person can certainly feel happy. The distinction is that when the blessed person of Psalm 1 encounters adverse circumstances, he or she still experiences a state or condition of blessedness. In other words, as the Psalmist promises, the blessed person in Psalm 1 will be like a tree firmly planted, sturdy, and steady and not like a tumble weed tossed about by every wind of circumstance. The blessed person has an inner strength, a supernatural source of strength, a state of blessedness regardless of the circumstances that one encounters. This is because of our eternal state in Christ.
Given the popularity of the prosperity gospel, it is important to note that any teaching that suggests we will not suffer in this life is false. Many prosperity teachers will take terms like “blessed” and twist them, implying that the bible says we’re the kings kids, so therefore if we live right we’ll receive material blessings, specifically, perfect health and abundant wealth. It is true that if we follow the Lord, things will tend to go better for us. However, the Lord clearly uses trials to discipline and grow his children. These trials are part of living in a fallen world, and the bible is full of examples. In scripture, it’s not a question of ‘if’ we’ll face trials, but ‘when.’