Owning a horse

THOROUGHBRED OWNERSHIP

"The thing about this game is you can get in it. You don't need a million dollars. We did it. The small guy can do it. Anybody can do it."
Mike Goetz, co-owner of She's A Devil Due, Grade I winner

As a racing fan have you ever wondered what it's like to be the owner of a winning Thoroughbred? Ever thought about how much fun it would be to be among the excited gathering of friends and well-wishers that ring the winner's circle after each victory? There are a number of ways to become involved as an owner, and they include everything from buying a horse by yourself to owning a small percentage of a horse with a group of friends.

Here are some possibilities:

Amount of Initial Investment	Possible Involvement
$1,000 - $5,000	One of two, three or more partners in an inexpensive horse
$10,000+	Sole owner of an inexpensive horse; general partner in a small partnership; limited partner in a large partnership or syndicate
$100,000+	Sole owner of one or more horses; sole owner and participate in partnerships; participate in partnerships only

As you can see, the game of Thoroughbred ownership can be played at many different levels and the fun and excitement are there at any level of participation.

The unique sights, sounds, and camaraderie of the backstretch in the morning. The beauty of and bond with the horse. The anticipation of race day, the anxiousness in the paddock before the race, and the rush you get from seeing YOUR horse in YOUR silks come onto the track, and, better yet, run down the stretch with a chance to win the race is available to all owners.

The pages that follow are designed to educate you, the owner. Information is power. We believe the more information we provide and more informed you are, the more fun you will get out of this game.

The first four topics of this site are designed for the first time owner and should be read in order. The topics thereafter are for both the first time and current owner and can be read in any order.

OWNERSHIP CONSIDERATIONS

The Thoroughbred industry welcomes new owners.

While participating in Thoroughbred racing and breeding offers an exciting opportunity, it is nonetheless a speculative opportunity. The game offers high risk, high emotion and high excitement. Money is won and lost, but no better time is had in the process.

Take a few moments to review these materials and to familiarize yourself with what Thoroughbred Owners and Breeders Association (TOBA) believes are basic pre-participation considerations. The place to start is with the recognition that horses are not machines; they cannot be programmed, nor do they perform on command. They are often temperamental and unpredictable. Like a child, a horse doesn't always live up to one's expectations. Good parents are prepared to deal with ups and downs, emotional and financial, of parenthood. So too are successful owners!

How does one become a successful owner? TOBA believes it begins with thorough preparation and continuing education, not to mention common sense. Every owner can become a knowledgeable and successful manager if he or she is willing to take the time to learn how to do something more about Thoroughbred ownership than write the monthly support check. If you are serious about participating in the Thoroughbred industry and becoming a new owner, consider these suggestions:

Get Familiar with the Game

READ!
Begin by reading or visiting the web sites of industry and trade publications such as: The Blood Horse, Daily Racing Form and Thoroughbred Times. Also, many farms and racetracks have informative web sites.

OBSERVE!
Attend the races. Attend the sales. Observe owners, trainers, consignors, buyers, veterinarians, and other professionals in action.

NETWORK!
Contact the owners and breeders organization in your state. Inquire about services offered and membership benefits. Become involved with the organizations and make personal contact with local horsemen.

COMMUNICATE!
Inquire of owners, trainers, and other industry insiders if you may speak with them regarding how you might get involved in the business. TOBA believes that you will be pleasantly surprised at the number of insiders who are willing to assist those seriously considering investing in the industry, regardless of the level of investment.

CONSULT!
Locate a consultant or more experienced owner who is willing to serve as a mentor. Be discriminating, and in the case of professional consultants, check references. Remember, the objective here is to identify someone you can trust. Listen to the advice given, but don't feel obligated to follow it, as ultimately every decision you make should be your own.

PARTICIPATE!
Participate in industry-sponsored events and educational programs.

DEFINE REASONABLE GOALS AND 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?