An Emeritus Member of the Presidency of the Seventy, Rex D. Pinegar, told this story in his BYU-Idaho Devotional on November 1, 2011 (the story is also told in his BYU-I devotional given on September 12th, 2000):

Some years ago I was assigned to a stake conference in San Diego, California. It was a hot, humid Saturday in June when I stepped off the plane and began searching for the stake president among the faces in the crowded waiting area. Although we had spoken to each other on the telephone we had never met in person. It was not difficult to spot him. He was the one person wearing a dark suit and tie. He was standing against the waiting room wall. As I approached him he smiled and I smiled and asked, “How are you, president?” His reply was a pleasant, “I’m happy!” I loved that greeting.

Throughout the day the president used that same response whenever he was asked the proverbial question, “How are you?” I determined that I would ask him about that greeting. As we were driving toward his home that evening, he beat me to it. “Elder Pinegar,” he said, “you want to ask me a question.”

“I do?”

“Yes. You want to know why I say, ‘I’m happy.’”

I admitted that I was curious and asked him to tell me the origin of this now familiar greeting.

This is his story:

He was called to serve a mission at age 19. During his initial interview with his mission president, he told him he did not want to be there. He wanted to go home. The president told him he couldn’t send him home. He couldn’t release him because he was not the one who had called him on his mission. He would have to stay. The young elder resigned himself to being in the mission, but he determined he would not work. Every weekly letter to the president contained a request for a release from the mission. In every personal interview with the mission president, he asked to go home.

After one such interview following a zone meeting, the president said, “Okay, Elder, you are going home. I’ve arranged for one of my assistants to remain with your companion.” The missionary could hardly believe what was happening. They drove to his apartment where he packed up his things, said goodbye to his companion, and then drove away. He was happy! He was going home!

As they traveled, the missionary began to express his gratitude to the president for allowing him to go home. “Oh,” said the president. “I’m not sending you to your home. I’m taking you to the mission home. I’m turning you over to my wife.”

“But I don’t want to go to the mission home. I want to go to my home,” the missionary insisted. They drove on in silence.

It was dinnertime when they pulled into the driveway of the mission home. The president’s wife came out to the car. With a bright smile she greeted her husband and then welcomed the frustrated missionary to her home with a question: “How are you, Elder?”

With a frown and an angry voice, he told her he was not happy to be there. He wanted to go to his own home. She smiled and said, “Elder, that’s the wrong answer. Now, look at me with a smile and say ‘I’m happy!”

“But I’m not happy! I just want to go home.”

“Wrong answer, Elder! Let’s try that again. How are you, Elder?”

His response was the same. “I’m not happy. I want to go home.”

“Wrong answer!” the mission president’s wife replied.

The fourth time she repeated the question, he was tired of what he considered “her little game,” and responded, without a smile, “Okay, I’m happy.”

“Good,” she said. “Now we can eat dinner!”
For four days, whenever the president’s wife saw him, she would pester him with the same question. He continued to reply, “I’m not happy! I want to go home!”

On the fourth night as the elder was walking down the hallway toward his room he saw her coming from the opposite direction. He knew what she was going to say, but this time he would surprise her with the “right answer.” “How are you tonight, Elder?” she asked.

“I’m happy!”

“That’s great, Elder. Now you can go back to work.”

This time he was more emphatic as he responded. He did not want to go to work. He wanted to go home. In a concerned but kind way she invited him to meet with her in the dining room. She had something she wanted to share with him.

As they sat opposite each other at a large table, she looked him squarely in the eyes and told him that he should be a happy, grateful young man. He had the gospel of Jesus Christ, which is the only true plan of happiness in the world. Only through this plan could he, or anyone, find true joy in living. By following it he could learn everything he needed to know and to do in order to find success and real happiness in life. She told him how the principles of the gospel blessed her life for good; how the power of faith and the atonement of Jesus Christ gave her strength to deal with the challenges and difficulties in life. She assured him that through faith and prayer he would be able to fulfill the mission to which he had been called.

As she expressed her deep feelings of faith and joy in the gospel he was filled with the Spirit and somehow his heart changed. He knew what she was saying was true. He was filled with gratitude that the Lord trusted him and had called him to share this great plan of happiness with others. He felt a strong desire to be a missionary, and he received the strength of faith to continue.

At the conclusion of their conversation, the mission president’s wife sweetly asked, “How are you, Elder?”

Now, he sincerely responded, “I’m happy!”

As the stake president concluded his story he said, “Elder Pinegar, from that time until now I have always responded with that truth, ‘I’m happy!’”