Purchase Price for AA - How does everyone do it?

[Always_WIP]

I’m starting to save up for my first horse. I’ve been surveying the market and trying to define exactly what I’m looking for. I’ve contacted a few sellers and looked at a lot of websites.

It’s really made me wonder - how is everyone affording these purchase prices? When “low five figures” is 15-25k, what is your strategy for doing this? Of course in the long run it’s not the purchase price that is the most expensive, but in a time where so many adults don’t even have 5k in savings, how is everyone attacking this?

I’m less interested in the careers that make affording horses possible and more interested in the logistics. Are you setting money aside every month for your next horse? Do you buy something greener so you can put the miles on it? Do you have enough invested/saved that if you needed a new horse in the next few months that wouldn’t be an issue? Did you end up adjusting some of your “wants” in order to get a lower priced horse ( ie <16h, age, etc).

I’m an AA eventer doing BN with Novice and maybe Training ambitions. I have no upper level ambitions but I am looking in the most marketable range - 16h+, 6-12 yrs old, at least Novice experience, Forward but safe, fine with bigger built TBs and draft X.

I’m really curious about what other AAs have done for their first horse. I’m hesitant to do a green horse since I don’t want to get in over my head and I’m not in a program that really has experience bringing up youngsters. But I know it would be one way of approaching it.

[wildlifer]

I could never afford to pay that much for anything, horse or otherwise. All my horses have been less than $5k, usually by a fair bit. But I have bought either green OTTB or my first horse was a 10 yr old Appendix who I taught to event & I am able to bring them along myself. So I guess my answer is, I don’t. But if you are not confident in your ability to bring along a greener horse, than it is cheaper for you in the long run to save up, otherwise you will just end up spending even more trying to fix issues.

It also takes a lot of patience, no matter what your budget, to find the right fit, so getting the word out to any horse connections of what you are looking for can turn up all kinds of things that are never listed on a sale website.

[soloudinhere]

It’s not my first horse, but I buy them cheap and put miles on them because I have the skills and the funds to do so.

You either pay it up front in the purchase price, or you pay it over time in the training/lessons/showing. It never comes for free.

[Scribbler]

I think the answer is that most ammies don’t spend that kind of money.

The USA in particular has seen a large increase in wealth at the upper end of the middle class, and a decrease or stagnation at the lower and middle of the middle class.

There are people in tech, engineering, medicine, law, entertainment, real estate, small business, etc. who are doing very very well. If a couple has a combined annual income of say $300,000 then a $50,000 horse may not be a stretch. I don’t know what % of horse owners fit this category but between the upper middle class and the truly wealthy, prices have certainly been driven higher for horses, tack, boarding and shows.

But many middle class career tracks have stagnated in salary in the $50,000 to $80,000 range and those people are not in general buying $50,000 horses.

I guess my advice would be to not spend more on a horse than you can afford to lose tomorrow in a freak pasture accident.

I am pretty good at saving so always have a cushion for cash purchases. But the idea of “saving up” for something specific worries me because it sounds like that means the thing is something you cant really afford.

I can’t see spending your annual income or even half your annual income on a horse even if you could save it up.

[candyappy]

I have no idea how people afford to pay that much for a horse. All I can say is buy what you can afford to pay for upfront. The costs of training , boarding and competing will be hard enough to afford for most. Paying in installments is a real bad idea all around.

Buy a youngster and bring it along yourself.

[ghst13]

I’ve known some AA’s that take out a loan for the purchase price. That’s not something I would be comfortable with but I think it’s not completely uncommon.

My strategy when I bought my second horse was to put away money every month into a separate account. I started saving several years in advance and gradually increased the amount I saved each month until it was equal to what it would cost to board and maintain the horse (in addition to my first horse). Even doing that my purchase price was less than $10k (plus PPE, new equipment, etc). It takes a long time to save up that kind of money. If I had held off another year or so I could have looked in the $10-25k range but I enjoy having a project to bring along myself.

[mmeqcenter]

Technically, the $300k combined income scenario puts that couple into upper class. I believe middle class is defined as $45k-$135k depending on location and family size.

If I had to guess, I would assume that a middle-class person paying $15k-25k+ for a horse is prooooooobably using a personal loan or other kind of financing to do so.

[Janet]

First, I have always been good at saving, as a general principle, not “saving up for” a particular goal. Even when I was a kid with a weekly allowance I saved most of it.

Second, I have always bought young or green, and/or from someone who needed to sell now. One was the estate of a small time breeder. Only one of his heirs knew ANYTHING about horses, and they needed to sell quickly to settle the estate. Another was a small time breeder whose farm was devastated by Hurricane Katrina. Another was a breeder with a hot green 5 year old who was only 15h1" (most people interested in a small horse want one that is very calm), A couple were just bought young from the breeder. They were all in the 4 figure, or very low 5 figure range.

[poltroon]

When I was in school and just starting out, every time my friends had alcohol I had water, volunteered to be the designated driver, and put $5 in my savings account. It didn’t amount to a ton of money but it was a nest egg.

When I found a horse in my mid-20s that was more than I had in that account, my grandmother offered me a loan for the rest. I insured the horse and I paid interest on it. (She also financed my car.) I was incredibly lucky and privileged to have that as a resource. It wasn’t a terrible deal for her either, since I paid better interest than the savings account, but of course the risk was to her retirement funds. I don’t think I would want to do that with a bank or with a friend though.

Shortly after, I had a lucrative change in employment and was able to pay off the loan.

If you’re interested in showing, you’re probably looking at board and training expenses of $1-2k a month, plus a few k in shows. Be patient for a year and you have $25k. That’s maybe hard to do, because maybe you were taking lessons or leasing or whatever, but it shows what a lot of money is flying around here.

I’ve driven each of my cars for 10-20 years; I don’t do fancy vacations; I don’t spend on a lot of things other people find important. I have a flexible job in tech. It’s not the best paying job I could get, but it lets me live with horses at home.

A green horse feels like it saves money, and it does in the sense that you’re not paying for the purchase and you have fun riding while it comes up the curve. But that’s only if you like riding horses like that (I do). An older horse may be a better bet actually, a schoolmaster who has been there and done that and can teach you what you need to know to bring along a horse later. Even if you only have that horse for a few years, the lessons you learn from the right horse can be very worth it. For a first horse, I’d suggest that. Lease if you can; that’s the best bang for your buck.

[Scribbler]

@mmeqcenter

Technically, the $300k combined income scenario puts that couple into upper class. I believe middle class is defined as $45k-$135k depending on location and family size.

If I had to guess, I would assume that a middle-class person paying $15k-25k+ for a horse is prooooooobably using a personal loan or other kind of financing to do so.

I am middle class and I could afford to buy a car, truck, trailer or horse in that price range out of my savings. I can’t see myself ever spending that on a horse, but maybe if I was much younger and more ambitious. I wouldn’t take out a loan for a horse, I haven’t even ever financed a vehicle.

Interesting what the cutoff for middle class is. I was thinking if you had say a physician married to a lawyer you could easily get a family income of $300,000 which would be entirely dependent on salary, not wealth. Since I live in a city where the basic suburban bungalow is at least $1.2 million, and a 2 bedroom condo is $500,000, a pre tax income of $300,000 a year wouldn’t go that far into getting you into the true upper classes here. A fancy house here on the water is $1O to $20 million. Exurban horse acreage at least $5 million. Etc.

[Janet]

I agree. If you are not comfortable with a younger greener horse. look for an older horse that is “stepping down” the levels.

[joiedevie99]

@Janet

I agree. If you are not comfortable with a younger greener horse. look for an older horse that is “stepping down” the levels.

I agree that these are excellent options when you are on a limited budget. That said, don’t forget to have a serious conversation with your vet to price out maintenance (injections, Adequan, chiro, etc.).

[DunByMistake]

I buy cheap and green and put in the miles myself. However, I love training horses. I genuinely get as much enjoyment from teaching a horse the first few good steps of leg yield as I did jumping Prelim cross country at a clinic with my previous horse. I have the skills to teach the horse and a coach whose always had do to the same thing so has a lot of experience.

For reference, the combined income of my household is about $200K Canadian. I suppose we could afford a house in the $20k range if I really wanted but it would be a stretch. We’re pretty good savers but it would take some time to set aside that kind of money. Honestly there’s just other things I’d rather spend that kind of money on. I spent about $5k on current horse including PPE. I can’t imagine the anxiety of having a $25k purchase sitting in the pasture, waiting to hurt itself.

[Mango20]

Does the horse really need to be over 16 hands? Horses in the 14.3-16h range can be found at more bargain prices because people think they can’t possibly ride a smaller horse. My most recent purchase was 5 years old, 14.3, and not too much time under saddle, but had done a dressage schooling show and schooled XC. I paid $3500 six years ago. She’s now a rock star eventing Training level, and could definitely go a bit higher with some dressage improvements. She was a bit farther than I wanted to go, but I kept coming back to her ad. I think she was for sale as long as she was only because of her size - too big to be a hunter pony and too small to be a “real” horse in many peoples’ eyes. I think you’ll find the same thing with horses between 15-16 hands.

To answer your question, I have only purchased young, green horses, with the one above being the oldest and most expensive one I’ve ever bought. In my younger days I was a pro horse starter for a small scale warmblood breeding operation at the farm I started riding with and started 5-6 per year. Clearly, that’s not a strategy that works for everyone. I would try to save up for a large purchase, and if it came along before the money was saved, I’d take a personal loan from my bank as long as I had the money to pay the loan and monthly horse expenses at the same time.

[mmeqcenter]

@Scribbler

I am middle class and I could afford to buy a car, truck, trailer or horse in that price range out of my savings. I can’t see myself ever spending that on a horse, but maybe if I was much younger and more ambitious. I wouldn’t take out a loan for a horse, I haven’t even ever financed a vehicle.

Interesting what the cutoff for middle class is. I was thinking if you had say a physician married to a lawyer you could easily get a family income of $300,000 which would be entirely dependent on salary, not wealth. Since I live in a city where the basic suburban bungalow is at least $1.2 million, and a 2 bedroom condo is $500,000, a pre tax income of $300,000 a year wouldn’t go that far into getting you into the true upper classes here. A fancy house here on the water is $1O to $20 million. Exurban horse acreage at least $5 million. Etc.

The article I read was by state average. I’m sure the fluctuation inflates significantly in highly urban areas like NYC, DC, etc.

You’re quite fortunate to not have to finance such things. Many, if not most, middle-class people are not in the same position, especially those in their 20s and 30s.

[Calvincrowe]

I’ll answer from the working, middle class salary, just starting out back in the day:
I saved. Yup, put money aside every month. Drove my Subaru for 16 years (god bless reliable cars!). I lived with my mom as her roommate-- paid rent, shared expenses–for a few years, too, but at a lower rate than I’d have paid in the open market.
I groomed. I worked my butt off for my trainer, who admittedly wasn’t a big operator, but I still got horses ready and set courses etc. on training days. I groomed at shows, too. I braided my own. Any way to save $$. I didn’t wear “big name, trendy” helmets, etc. but I was always “in fashion”. I shopped used-- blankets, saddles, bridles, hunt coats, breeches, boots.
I had a side hustle. Once we had a small farmette (husband would have bought property even if we didn’t have horses in our lives…he wanted no close neighbors!) I boarded horses-- babies destined for the track at first, then retirees. It offset the cost of my showing and eventually, offset the cost of my own retired horses.
I did buy young and green, but really, the best horses I ever had were those stepping down. So much to give! My current horse is a “stepping down into old lady hunter land” with me and she’s making my own “step down” years fun and exciting.

You CAN do this! Be creative, work hard, show strategically, be humble enough to buy used and look for bargains.

Long story short, you CAN do it.

[Always_WIP]

So many good viewpoints! I’m lucky that if I saved, that purchase price is possible. However it comes back to do I really want to spend that on something that could have a career limiting injury within the first month of ownership? There are no guarantees with horses. We all know how much they love to get up to crazy antics.

It sounds like most folks leverage connections and their own experience to get something slightly greener, and have the patience to wait for the right horse/steal of a deal.

I’m very cautious and detail oriented, so I setup a savings tracker with a bunch of different categories (purchase price, commission, ppe, shipping, travel, vet, boarding, tack, emergency fund). My rule is nothing happens until that emergency fund amount is met. Once it’s met then I can start casually looking, and if a crazy steal drops in my lap I’ll be ready. Otherwise, I’ll keep setting money aside until I find the right horse. Then it just a question of when I “call it” and stop adding to the fund.

Taking out a loan for a horse sounds crazy to me - I don’t even like financing a car and prefer to pay in cash whenever possible.

[Scribbler]

@mmeqcenter

The article I read was by state average. I’m sure the fluctuation inflates significantly in highly urban areas like NYC, DC, etc.

You’re quite fortunate to not have to finance such things. Many, if not most, middle-class people are not in the same position, especially those in their 20s and 30s.

True. I couldn’t afford money or time to ride in my 20s and 30s.

[clanter]

@Janet

First, I have always been good at saving, as a general principle, not “saving up for” a particular goal. Even when I was a kid with a weekly allowance I saved most of it.

Second, I have always bought young or green, and/or from someone who needed to sell now. One was the estate of a small time breeder. Only one of his heirs knew ANYTHING about horses, and they needed to sell quickly to settle the estate. Another was a small time breeder whose farm was devastated by Hurricane Katrina. Another was a breeder with a hot green 5 year old who was only 15h1" (most people interested in a small horse want one that is very calm), A couple were just bought young from the breeder. They were all in the 4 figure, or very low 5 figure range.

I bought a very good filly at the “right time” the seller needed to pay the IRS

There are wild cards out there, we bought land to keep the bargain filly on…turned out the pasture had oil and gas under it…the drilling company paid $25,000 per acre for the drilling rights then there was the production royalties… horses paid for themselves

and now developers want the land offering to pay by the square foot

was any of this planned, no… just kind of happened by the grace of God

[Always_WIP]

@clanter

I bought a very good filly at the “right time” the seller needed to pay the IRS

There are wild cards out there, we bought land to keep the bargain filly on…turned out the pasture had oil and gas under it…the drilling company paid $25,000 per acre for the drilling rights then there was the production royalties… horses paid for themselves

and now developers want the land offering to pay by the square foot

was any of this planned, no… just kind of happened by the grace of God

That’s great! Sometimes these things just work out and all the stars align.