30 - 2013

Investing in a Race Horse Without Breaking the Bank

horse-1366794325TxdPeople attending a horse race like the Kentucky Derby often imagine themselves as one of the people standing in the winner’s circle with a beautiful racing horse. Most people however consider it just a fantasy. Once considered the sport of Kings and business moguls because of the high cost of owning, training and racing a horse it is now becoming an investment accessible to more people. While it can be an expensive proposition, it is possible to invest in a racehorse without breaking the bank. If investing in a horse does not seem interesting to you, you can always bet on Kentucky Derby and try to win big money!

The cost of a race horse at the Kentucky Derby, ranging from a few thousand to several million dollars, boarding fees, training costs, transportation, veterinarian care, jockey and race fees can be prohibitive for most people to ever be a single owner of race horses. However, modern day racing syndicates allows would be racing horse investors to buy anywhere from to 2 to 10 percent shares of a horse or horses. As an investor you can either buy into a percentage of specific horses or buy a percentage of a syndicate group of horses. As a syndicate owner you will be responsible for all expenses and share in all profits in proportion to your ownership percentage.

While many may be tempted to individual percentage ownership there is the same drawback as other limited asset investments. While a payoff may be large owning single horses you have limited chances for success. Buying into the syndicate itself, like buying into a mutual fund, spreads your investment over several horses giving more opportunities for pay off. Buying into a syndicate also comes with an advantage for those new to the racing world of already having a team of experts in place looking out for and guiding your investment. It is never advisable for someone new to the complicated horse or racing world to try to do it themselves. It is also important to understand that horse racing is like any other investment comes with the risk of losing your entire, both the initial investment and ongoing expenses, investment.

A final trend in race horse investing is to buy fillies, young female horses, for future breeding purposes. While colts, young males, are the stars of the horse racing world fillies can be an incredibly lucrative investment outside of the winner’s circle. Many investors buy fillies, race them for a short period to build a background and then use them as broodmares. Breeding fees, even to top studs, are often less than the colts in their line will sell for leaving the investor to be able to increase his racing stock at a cheaper price or sell off young colts from good bloodlines for a profit.

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