Finances are very much on my mind lately (I have a horse: when aren't they?), especially after spending yesterday at Equine Affaire and seeing loads of lovely, expensive horses for sale.
I'm going to assume that if you're a horse person you have gone into debt for something at some point. Maybe for something good, like a new truck or trailer or even a farm. Maybe for something bad, like unexpected vet bills or a new saddle that had to happen sooner rather than later. I shelled out $3k+ in vet bills this summer: I hear you.
In addition to finances, I've also devoted a lot of time to thinking about what my next horse will be like. Don't worry - Tristan is doing great, and not going anywhere. But he's 22, and I'm an obsessive planner. I have some really specific things that I want, and those things are probably not going to be cheap.
I paid $150 for Tristan. $50 of that was a Christmas gift from my family. I often joke that literally everything about him - from his bridle to one set of shoes to my helmet - has cost more than he did.
I will almost certainly not be going that route with my next horse.
So, I ask you:
Would you ever go into debt to buy a horse? Take out a personal bank loan? Pay a broker in installments? Jointly purchase with a trainer and pay back over time? HAVE you ever done this?
I'm genuinely curious. Please let me know if you would, and if so, what the circumstances would be. Or if you have done it, how did it work and did it work out?
You can definitely buy horses on installment plans, Dante's breeders offered me that, and I know several people who have done it in the past. I'd also take out a personal loan from a family member (say my mom), but other than that I wouldn't. I know a lady at our barn when I was in highschool took money out from her house (+ wedding money) to purchase her horse. When I was a kid and really wanted a horse this seemed like something I could convince my mom to do (it wasn't haha). She ended up not liking the horse very much and her newly minted marriage dissolved about a year and a half later. I dunno all the reasons behind that but I figured it had something to do with how she was anyways and
ReplyDeletewhoops hit enter.. and well I think most marriages end because of communication and money issues and she seemed not very good at communication either.
DeleteI made payments on my current horse just to his owner. They are family friends and they let me put a certain amount down and then I just owed the rest within two years. They ended up asking for the money earlier than that, so I guess I sort of "went into debt" to pay them because I gave them that money out of my very depleted emergency fund (I had been unemployed) and then had a few months of credit card debt before I was able to pay it all off.
ReplyDeleteI don't think I'd do it again, and I don't think I'd take out any loan for a horse. Literally TC got hurt before I had paid back even 50% of him, so then I was basically paying money on a horse who was absolutely not worth that money, AND I was paying for vet bills and rehab at the time.
I have known people who take out loans, or do payment plans. I would much rather do that over go in with someone. That never seems to end well.
ReplyDeleteIt was drilled into my head from a super young age that the only thing worth going into debt for was real estate - anything else should be planned/saved for. I've become less militant about that as I've gotten older and had to deal with life's curveballs, but I still try to keep debt/payments to a minimum. While there were probably points in my life where I would have taken out a personal loan from a family member for a horse, now I think I would try to avoid that (or any other kind of financing). Like Megan pointed out above, the unpredictable nature of horses could mean you're stuck paying on a loan with nothing to show for it if anything happens to the horse -- or if there is a medical emergency, you can end up with payments on the horse plus payments on vet bills. I also watched a friend go the "make payments to a trainer" route and she got burned about three times over (and is still making payments on the latest horse).
ReplyDeletei don't think i would ever take out an actual formal loan to buy a horse bc..... if i had to go into debt just to buy the thing, how am i going to manage the upkeep? that said tho, i financed my horse's recent surgery - mostly with the idea being i'd rather have cash on hand should something else crop up while paying off that loan. payment plans and installments in my mind are something different from a loan and don't make me as nervous.... but an actual formal loan? no. also i can't see going in on horse with someone unless there are very very specific terms about repayment there, as you say in your example above with the trainer. even so, it would be awful to have a deal go south and potentially sour a relationship.
ReplyDeletePersonally, I would not take out a loan or borrow from someone, but that is just me. Everyone has their own comfort level with finances. I am sure the money I paid for Ellie could have been put to more responsible, adult use, but after years and years of free off-the-track horses and wanting something "nice" for once (not to mention that I also got a GREAT deal on her LOL and probably never will have such luck buying a nice horse again), I don't regret it! :-)
ReplyDeleteI am paying my current horse off. I agree with many of the above comments. I am not comfortable taking our a loan, but seem fine with a "pay off plan." I didn't have time to save up for a horse, so this is what worked for me
ReplyDeleteI don't go into to debt for anything other than real estate. Maybe a car. I couldn't see doing it for a horse. But I don't compete at the high levels and have never needed to buy an expensive horse.
ReplyDeleteI boarded with a woman that took out a bank loan to pay for her nice hunter. I basically took a loan out to buy Gracie: I did a crazy thing with Paypal's Bill Me Later that allowed me to pay for her lump sum with a check. I then paid the amount off by making payments to PayPal. The beauty of this was that there is an interest-free period for purchases over $100 with Bill Me Later so I just made sure to pay the amount off before the interest-free period ended (I think it was 6 months.) Thankfully nothing catastrophic happened during that time. It's kind of a risk, especially if the horse gets injured before he/she is paid off, but some people do do it. :)
ReplyDeleteI have a close friend who took at a low 5 figure personal loan from the bank to buy a horse. For her, she saw a business opportunity because she was a young pro and planned to flip the horse. It worked out, but it was really risky.
ReplyDeleteI think everything has a circumstance...personally I try not to owe a "person" money, and I don't think borrowing money from friends/family ever ends well lol. I did two "half" payments on my mare, mainly because she was my trainers horse and I wanted to be sure she didn't leave to get sold while I sorted out the finance. I know how my spouse feels on the subject, so I realize that whatever we buy next will need to be outright.
ReplyDeleteSo.. My situation is a little different, I guess.
ReplyDeleteI was working at the barn when I decided that I wanted to buy Archie. I would have taken out a loan, I think, if everything else hadn't happened the way it did. Or I would have given up the dream of horse ownership for a little while longer.
My car was totaled right before I bought him, so I took a percentage of that money and put a down on him. I borrowed a car for a while until I could afford to buy another POS. Then the barn that I worked at, and who I bought him from, allowed me to make monthly payments on top of my board towards his remaining balance.