Defining Reasonable Goals & Objectives
Prudence dictates that you begin by answering these questions:
How much money can I afford to allocate to horse ownership?
Generally speaking, the level of investment is the primary
consideration in determining the most appropriate means of becoming
an owner. Determine the total amount of money that you are willing
to allocate to this investment. Develop a budget, identifying the
amount to be utilized for the initial purchase, and obtain realistic
estimates of daily expenditures.
How much time do I intend to devote to my equine activities?
Unfortunately, to answer this question you will need to ask
yourself: How involved do I intend to be? Will my schedule permit me
to spend time monitoring my equine investment? For example, do you
have the time to talk with the trainer, or to visit the stable area,
racing office or track kitchen on a daily basis?
Do I prefer to participate as an individual or in partnership?
The level of investment and amount of time you have to spend on your
equine activities should guide you in determining the appropriate
form of ownership. TOBA recognizes, however, that personal
preferences and past experiences may be equally important.
Obviously, there are advantages and disadvantages to each form. What
level of control do you wish to maintain? Are you the type of
individual who must call all the shots, assume all the risks, and
have all the glory? Or, are you the type who prefers to spread the
risks and share the rewards?
What are my short-term and long-term goals?
How long are you willing to wait for a return (not necessarily
financial) on your investment? Are you looking for the immediate
action offered by racing or the long-term challenges of breeding and
developing young horses? Thoroughbred racing and breeding offer both
types of investment opportunities, challenges, and more!
What type of equine investment should I make?
If immediate action is what you desire, then your investment
opportunities will be quite different from those interested in
breeding and developing young stock. However, the opportunities are
not mutually exclusive. You may consider diversifying your
investment by purchasing a filly as a broodmare prospect, breeding
her and selling the offspring, acquiring a stallion share, and/or
owning horses of racing age.
Where should I conduct my equine activities?
It seems that every owner wants to be able to see their horse as
often as possible, but that is practical for only a very few.
However, if having convenient access to your horse is imperative,
then you must think and act regionally. On the other hand, given
that some states offer more lucrative racing and breeding programs,
you may wish to consider how those programs could impact your
investment. State owners' and breeders' organizations can provide a
complete explanation of their respective state-bred incentive
programs.
At what level am I looking to participate?
Everyone wants to own a classic winner. Unfortunately, not all
horses have the ability to compete and win at the top level. There
are many levels at which you can participate (i.e. the claiming,
allowance, or stakes levels). You can compete on a regional and/or a
national level. An owner's financial resources ultimately dictate
the level at which one competes. Again, if action is what you want,
your strategy will be different from someone seeking the classic
horse. You will likely spread your money out over a larger stable,
with more horses racing on regional circuits. If your goal is to
find the big horse, you might have fewer horses which race less
often.
Commercial breeding presents a similar scenario. Not everyone can
participate at the top level. However, there are ample
opportunities, certainly in the middle markets, where breeders can
sell and buyers can purchase a useful horse.
Remember, the thrills of owning a claiming horse or breeding a
maiden winner often match those experienced by the owners of more
accomplished horses.
What type of tax treatment do I seek for my equine business activities?
Regardless of which form of ownership you choose, you should
seriously consider structuring and treating your equine activities
as a business because of certain tax and liability issues. Always
consult with your tax advisor for the proper way to structure your
equine business. A more detailed discussion of this subject can be
found in the Business Issues chapter of this web site.
What can I expect to gain from my experience?
How does a wonderful network of new friends, endless social
activities, a sense of significant achievement and hours of
unsurpassed entertainment sound?
