The Study of Pi(nance): Financial Planning Lessons from Pi Day

Mar. 14, a.k.a. Pi Day, is a celebration of the never-ending, irrational number that represents the ratio of the circumference of any circle to the diameter of that circle. Pi Day, which commemorates the first three numbers of Pi (3.14), came about in 1988, when physicist Larry Shaw created the day to celebrate Pi and all things mathematical. (Shaw worked at the San Francisco Exploratorium, which hosted a circular parade and free slices of fruit pie.) In 2009, The U.S. passed a resolution to recognize Pi Day on Mar. 14, which also happens to be Albert Einstein’s birthday.

You probably don’t think of Pi when you think of financial planning, but we see some interesting correlations between the two. Here are five “pi-nance” lessons to learn on this auspicious day:

First things first: let’s talk circles.

The circle is a universal symbol that represents totality and wholeness. Financial planning should also consider the whole person. At Savant, we present our 10 key financial planning disciplines in a circle because we believe they work together as our clients pursue their ideal futures. How are these disciplines working together for you? Take our three-minute financial health assessment to learn more.

Second, Pi is famous for being an infinite decimal.

That never-ending string of numbers is a great reminder of the importance of long-term financial planning, especially for retirement. Don’t wait until it’s too late to think about where your retirement income will come from. Contribute consistently to your retirement plan, and watch that nest egg grow over time – just like those ever-expanding Pi digits!

Third, Pi is never-ending, reminding us to think long-term.

Financial planning, like Pi, is not a “one-and-done” application. At Savant, we take a long-term approach, because we know the markets are not predictable. This uncertainty is a major reason why investors earn a return. We’ve learned that moving in and out of the market – based on emotion – can lead to higher costs and potential tax implications. When working with clients, we take an evidence-based approach, designed to help you align your investment strategy with your long-term goals and objectives.

Fourth, Pi’s non-repeating number sequence reminds us of the importance of diversification.

Just like Pi’s decimal places never repeat, your investment portfolio shouldn’t be concentrated in one area or asset allocation. While it may be tempting to double down on an asset type following a period of strong performance, we believe having a well-diversified global portfolio can help you systematically capture market returns around the world, including where you live. Diversification also is designed to help you weather extreme ups and downs in the market and potentially help increase the reliability of outcomes over time.

Finally, let’s not forget the joy of celebration.

Every digit of Pi is a reason to be proud of the progress you make toward achieving your ideal future. Did you reach $1 million in your retirement savings plan? Fund a 529 plan for your grandchild’s education? Treat yourself! Celebrate your financial wins, big or small. After all, a little reward keeps the motivation burning bright.

So, there you have it. Pi Day, a day dedicated to an infinite number, just gave you some finite, actionable tips for working toward a secure financial future. Remember, financial planning doesn’t have to be a dry, boring chore. Working with a financial advisor to envision the retirement of your dreams can help you stay inspired. Happy Pi Day. How will you celebrate?