In this study we examine the constructs "happiness" and "wellbeing" in a sample of Canadian women and men in mid-adulthood. Through a sequential mixed-methods approach, we utilize Sen and Nussbaum's conceptualizations of capabilities to inform the themes generated from semi-structured interviews. We find that participants understand happiness and wellbeing as two distinct constructs that are illuminated in the metaphors happiness as balance and the gears of wellbeing. Second, we corroborate these constructs through a principal component analysis of questionnaire data. We conclude that happiness and wellbeing are not static entities, but rather iterative processes that are constantly in flux and determined by the fulfillment of the often contradictory needs for (1) goal-achievement and an acceptance of reality, and (2) freedom along with meaning-making, which often involves creating restraints in one's life. These findings have important implications for those using happiness and wellbeing as policy outcome measures.