Congrats, graduates. After years of hard work, you’ve accomplished your educational ambitions and had some fun along the way. Now you are stepping fully into adult life, seeking to build good lives grounded on a solid financial foundation. You have your work cut out for you.

Many are struggling to accomplish those goals. Americans now carry $1.25 trillion in credit-card debt and $1.7 trillion in student loans, with the average new graduate owing roughly $40,000 against a median starting salary near $52,000 — while credit-card rates sit near record highs at over 22% on average. Housing prices are historically inflated. And many young people are concerned about employment in the age of AI.

More troubling, even those who accumulate a solid net worth find that it doesn’t automatically translate into a life worth living. On average, the world has never been richer. But that prosperity hasn’t translated into fulfillment. Rates of loneliness, unhappiness, anger, and stress are near all-time highs. And groundbreaking work from the Global Flourishing Study — the largest of its kind in history — has found there is an inverse relationship between the prosperity of a society and its composite measures of human flourishing.

So, what is a new graduate to do? As you enter the working world, permit me to offer a little advice based on what I’ve learned writing my new book, “Good Money.”

First, anchor your ambitions in a solid understanding of what makes life worth living: what modern researchers (and ancient scholars) call “human flourishing.”

What is that? Two of the great living social scientists give nearly identical answers. The University of Pennsylvania’s Martin Seligman, through his PERMA framework, and Harvard’s Tyler VanderWeele, who directs the university’s Human Flourishing Program, offer a series of similar ingredients for a flourishing life. They include things like happiness and positive emotions, mental and physical health, meaning and purpose, accomplishment, engagement, character and virtue, and close social relationships. These are intrinsically good things and worth pursuing for their own sake.

Money is conspicuously absent but not irrelevant. VanderWeele names “financial and material stability” as the enabling condition of flourishing, the platform on which the rest is built. You cannot cultivate friendships while panicking about rent, or do meaningful work while drowning in credit card interest. Money can enable flourishing, but it isn’t intrinsically good; it has its limits.

Decades of research have confirmed this view. Nobel laureates Daniel Kahneman and Angus Deaton, in a study of more than 450,000 Americans, found that emotional well-being rose with income to about $75,000 a year — roughly $105,000 today — and then plateaued. Beyond that level, the good life is not dependent on finances, but on the inherent human goods mentioned before.

So, the question for new graduates isn’t “How do I get rich?” but “How do I build the platform that frees me to flourish — and then deploy my money in service of that flourishing?”

To develop that initial financial freedom, embrace a few simple practices. Save and invest now. Compound earnings are the closest thing in finance to magic. Invest $10,000 today at 22 in an S&P 500 index fund earning the long-run historical return of about 10%, never add another dollar, and you will have roughly $740,000 by retirement. Wait until 32, and you forfeit two-thirds of that future. Open a Roth IRA. Take the full 401(k) match. Automate it.

As you do so, avoid “bad” debt. Nearly 38% of Americans earning over $100,000 still carry credit-card balances — lifestyle creep does not stop at six figures. My rule is simple: never let your net worth go negative. Pay your card off every month, and borrow only for things, like a mortgage, that may hold their value.

To avoid debt and invest consistently, consume modestly. We are often tempted to consume “things” we think will make us happy, often depleting our resources to do so, only to find the thrill of acquisition is fleeting while its pursuit never ends. Psychologists call this the hedonic treadmill: each new apartment, phone, and car delivers a brief thrill, then fades. And we then run faster to acquire more. A recent Empower survey found that no matter how much Americans earn, “rich” is always a salary band or two above their own. And consumption goods that feel good in the moment rarely yield lasting satisfaction. Consider setting a financial finish line — a lifestyle above which you will never live — and stepping off the financial treadmill and into a race you can actually win.

With a prudent financial foundation established, direct your attention to making every way in which you encounter money — earning, spending, giving, investing, and saving — align with what we know to be true about flourishing.

Earn with purpose. Do not take a job for the paycheck alone. Pew Research finds that only 17% of Americans mention their work when asked what gives their life meaning — a quiet tragedy, considering we spend a third of our waking lives there. Find work that uses your gifts and serves something you actually care about. Purpose and prosperity are partners, not enemies.

Spend on what will actually make you happier. As noted previously, “stuff” doesn’t lead to lasting happiness. Buy the bare minimum of consumer goods and dedicate what you have to enabling the core tenets of flourishing — investing in your physical, mental, and spiritual health; purchasing life-changing experiences; and investing in relationships with others.

Give generously — and start now. A landmark 2013 study in the Journal of Personality and Social Psychology examined 136 countries and found that prosocial spending — giving money to help others — boosts happiness in rich and poor nations alike, in sums as small as $5. Commit a percentage of every paycheck before lifestyle creep convinces you that generosity is for later. It isn’t. Lifelong generosity is one of the two or three most critical components of a flourishing life — for you and others.

And finally, when you invest, invest for impact. Over the next 50 years, you will deploy more capital than you can imagine — into companies, communities, and the great human projects of your time. Treat your portfolio as an extension of your values, not just a number on a screen.

The poet Mary Oliver once asked, “Tell me, what is it you plan to do with your one wild and precious life?” The Class of 2026 has been handed a rare gift: fifty years of compound time, four or five decades of meaningful work, and clear evidence of what actually leads to a flourishing life.

Use it. Build the platform. Then build the life. Money cannot buy your flourishing — but earned with purpose, spent with care, given with joy, and invested with intent, it will clear every obstacle in its way.

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John Coleman is Co-CEO of Sovereign’s Capital and author, most recently, of Good Money: Six Steps to Building a Financial Life with Purpose (Harvard Business Publishing, 2026). You can follow him on Substack at On Purpose.

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