The saying of the Prophet (PBUH) quoted in this Hadith relates to two different occasions.
Firstly, to the Ghazwah of Al-Khandaq (the battle of the Trench) when Muslims were engaged in digging the trench under very difficult circumstances. It was intended to impress upon them the need for patience and boost their morale. They were made to understand that they should not be perplexed by the strenuous period they were passing through because these were transitory and temporary phases of life after which lay the everlasting life, the real life that was not only permanent but also full of perpetual luxuries.
Secondly, to the occasion of Hajjat-ul-Wada` (last Hajj performed by the Prophet (PBUH)) when he saw around him a large crowd of Muslims. Then he warned them against becoming proud or overjoyed by their strength and power. The grandeur and majesty being witnessed by them would come to an end. The real life was of Al-'akhirah (Hereafter) and they should do their utmost to reform it.