Pi Day: Celebrating an irrational constant that makes sense of the world

2 min read

March 14 (3/14) is celebrated as Pi Day, since Pi or 22/7 is commonly shortened to 3.14. But did you know that there are some fun facts that are common to Pi and Personal Finance?

Irrational

Pi

Is an irrational number because it has infinite digits after the decimal with no repetition or obvious pattern.

Personal Finance

Irrationality is seen in personal finance as well due to cognitive biases like loss aversion bias, anchoring bias, herd mentality and many more.

Constant & Undeniable (Irrefutable)

Pi

Pi is a constant, defined as:

All circles follow this rule.

Personal Finance

Some aspects in personal finance are constant and irrefutable (undeniable) as well, like saving for a rainy day, systematic savings, hedging risk, and safeguarding your loved ones with insurance.

Reduce (Truncate) and Move On

Pi

The end of Pi cannot be seen but it is reduced to 3.14 for practical reasons.

Personal Finance

In personal finance too, there are situations where the conclusion cannot be predicted. However, one can make a practical decision and move on. For example, it might not be possible to predict when a current bull run will end, but it doesn’t mean that you postpone the buying of shares. Instead, start an SIP* to average out the cost of purchase.

Makes Sense of the world

Pi

Pi is the constant that makes sense of the world – it gives the formula for a circle’s circumference and surface area, a sphere’s volume and has a role to play in the pattern of zebra stripes and leopard spots.

Personal Finance

Following simple guidelines of personal finance can help resolve the uncertainty and volatility of the world and can help you stay aligned with your financial goals.

*ICICI Bank Limited is a AMFI Registered Mutual Fund Distributor. Mutual Fund investments are subject to market risk. Read all scheme related documents carefully. T&C Apply.