Rebbe Nachman's story continues with a shift to the life of the Simple Man who only had one old tattered coat. Despite that, when he had to go out, he did so with complete joy and did not allow himself to be concerned with what others might think of his attire.
Rabbi Aroush says that this shows us how genuine his joy was. This was because his joy was predicated on his understanding that whatever he had it was because God willed it to be so. His joy did not depend on the approval of other people. He did not get caught up in "keeping up with the Joneses." Even when other could see that he was lacking it didn't bother him.
Real inner joy can only come when someone doesn't care if others are singing his praises or if they are ridiculing him. Living with Emunah means living with God, not with people. If people think something is not good, does that make it not good?!! Joy that is dependant on other's approval is merely superficial. The moment the person is open to criticism or ridicule he will fall apart.
Once again he has hit me where it counts; this issue has been a real challenge for me for many years. I couldn't possibly begin to count the number of times I have worried about the approval of others, rather than only concerning myself with the approval of God. How many times have I done things, or not done things, because I was concerned about the approval of other people?
I still have a long was to go to overcome this tendency, but the more I place my focus on God, and the less on other people's concerns, the closer I get to this ideal of happiness.