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Could investing in a racehorse make you rich?

Racehorse Success Stories

The economics are simple: The more a horse wins, the more the horse is worth.
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In 1975, Karen and Mickey Taylor bought a young colt for $17,500 and named it Seattle Slew. The horse won Thoroughbred racing's Triple Crown, beating the best of the best at the Kentucky Derby, the Preakness Stakes and the Belmont Stakes. Seattle Slew earned $1,208,726 in his career, which included 14 first-place wins. Slew also earned $12 million when the Taylors put him out to stud and millions more with the sale of his offspring [source: SeattleSlew.com].

Such success stories are rare, but they do happen. Owners make money when horses win. Generally, the winner receives 60 percent of the purse; second place, 20 percent; and third place, 12 percent [source: theracinggame.com]. The economics are simple: the more the horse wins, the more the horse is worth. Owners are likely to invest, purchase or claim a winning horse.

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However, the real scratch -- millions if the horse is a champion -- comes from breeding. In 2000, a racing syndicate bought Kentucky Derby winner Fusaichi for a whopping $60 million, a record-setting price. Today, the Thoroughbred commands a stud fee of around $200,000. Since Fusaichi was young when he retired, he could sire hundreds of offspring [source: PBS.com]. You do the math!

For more information about horseracing and related topics, check out the links below.

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Sources

  • Animal Planet. "Jockey Income Facts, Animal Planet."  2010. (Oct., 2010)http://animal.discovery.com/tv/jockeys/horse-racing/jockeys-101/income.html
  • Investment Advisor. "Beware the Hidden Costs of Racehorses." March 5, 2007. (Oct., 2010)
  • Brunker, Mike. "Not for Widows and Orphans." MSNBC.com. (2008). (Oct., 2010). http://nbcsports.msnbc.com/id/4838915
  • Pedulla, Tom. "Once the sport of kings, now galloping toward uncertainty." USA Today. June 3, 2010. (Oct., 2010) http://www.usatoday.com/sports/horses/2010-06-03-racing-uncertain-future_N.htm
  • Perritano, John. Time For Kids: Big Book of Why. New York, NY: Time, Inc., 2010.
  • Seattle Slew. "About Seattle Slew." 2010. (Oct., 2010)http://www.seattleslew.com/about_slew.aspx
  • Sparkman, John P. "Gone, but Not Forgotten." The Thoroughbred Times. May 18, 2002. (Oct., 2010) http://www.seattleslew.com/articles.aspx?aid=9
  • The Racing Game. "Frequently Asked Questions." 2007. (Oct., 2010) http://www.theracinggame.com/lists/faq/allitemsalt.aspx
  • The Racing Game. "The Thrill of Ownership." 2007. (Oct., 2010) http://www.theracinggame.com/default.aspx
  • Thoroughbred Owners and Breeders Association. 2010. (Oct., 2010)http://www.toba.org/
  • Wharton, Dave. "Slim Pickings for Racehorse Owners," Los Angeles Times. November 2, 2009. (Oct., 2010) http://articles.latimes.com/2009/nov/02/sports/sp-owners2

 

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