Tony Baker Article

[Regina Moore]

Tony Baker asked some questions in this recent article. I thought it would be good to have a thread so others could respond.

For me, I'm a freelance bookkeeper and also a ProAdvisor for Quickbooks, which is a highly popular accounting software for small business. So, for the first 15 or so SIM game years, it was natural for me to track my SIM stable expenses on Qbooks. Not only did we not have the Financial Summary available then, but I wanted to track income and expenses by horse. So, I made all horses a "class", and then when a horse was sold, claimed away, or pensioned, I could run a Profit and Loss report by class and see how much I made or lost on that horse. After some 15 game years, and an increasing foal crop that peaked at 450 foals one year, I did away with all that effort. I have continually wished that the SIM would let us see profit and loss by horse, though my bank balance is so high now that, for me, it really doesn't matter.

So, I did run my stable like a business for a long time. I knew that in order to pay millions for potentially good horses or stud prospects, I needed to keep my bank balance growing. The only way to grow was to make a profit on the vast majority of horses I bred or purchased. So, I wanted to see hard black-and-white numbers on whether or not various horses actually made me money. I think that's one of the biggest mistakes newish players make -- they spin their wheels just trying to keep their financial head above water, without pro-actively trying to grow their bank balance.

Now, after some 28 game years, my bank balance is over $80 million, so I don't really care about making sound financial decisions, and sometimes do things that could be considered foolish from a financial standpoint. I built my stable with the purpose of establishing a solid financial foundation, and I was so successful at that, that I could weather many disastrous years before running into financial trouble.

If you care about eventually having enough money to be able to buy or breed good horses, you need to pay attention to what you're spending and focus on an ever-increasing bank balance.

[Lucas Davenport]

No I don't run it like a business, because it is a game. And to quote the words immortal: "I don't count my money when I'd sitting at the table."

As far as Tony's concern about breeding costs: I pretty much bred my own in house for many, many years while accumulating numerous reasonably decent stallions. Now I rarely buy any new stallions. As a newer player I would recommend against paying up for top of the line stallions. Make sure your stallions match your mares in value.

[Dylan Christensen]

Make sure your stallions match your mares in value.

I think I'm really guilty of not making sure my mares get sent to stallions that match there value. I tend to go for most of the top studs only and it doesn't really allow me to ever build a huge bank balance because only a few horses really pan out. I think I now have only mares that deserve mid-top studs now so hopefully this issue will disappear but it definitely is something that will kill your bank roll.

[Tom Lin]

If a new player is intent on breeding, I believe it is important that they breed to stallions that will provide value. These are usually stallions somewhere in the middle, $10-20K (I thinking mostly mixers). You probably won't get a freak but should get a useful horse and useful horses always tend to show a profit. Chances are they don't have the mares to breed to upper echelon type stallions when the chances of achieving a profit is significantly less.
Having a barn full of bad horses by breeding to bargain basement stallions and/or breeding to top stallions with less top mares will bring the new player quicker than anything to bankruptcy.
I know new players are constantly told this: " Don't breed until you have a very comfortable bank balance and a steady stream of income."

[Stormy Peak]

I run my stable more like a sanctuary than a business...lol. I've never sold any of my horses, but for one early on, nor do I send them off to AJ. Once I buy a horse for myself it stays in my stable until it dies while foaling or in the pensioner pastures. (I do lease some out at times though and have had a few mares end up in my cemetery after they were bred by someone else)

It's not a good business plan, but it's how I like playing the game - my stable could be a lot richer, but I'm ok with where I'm at money wise.

I kind of track my horses but in just a basic way. I also try to give even the 'different career' horses a chance to earn money and rarely retire a 2 year old and often will wait until a horse is well into it's 4 year old season before I give up on one...and usually those are the routers. Sprinters are often gone by the end of their 3 year old season if they are not going well.

Below is directly from my notes section:
(minimum expense racing a horse for 1 Sim-year if you don't send your horse back to your own barn/don't own a barn)
-----------------------------------------------------
EXPENSES:
Sim-Yearly Week board at $20 farm: $320 ($20/week x 16 weeks)
Sim-Yearly Daily rate $5: $560 ($5/day x 7 days/week x 16 weeks)
Minimum Travel Cost Round Trip $200 IF 7 races a year = $1,400
*********foals and pensioners not charged a day rate*********
Minimum cost to race for 1 year:
Board $320 + Daily $560 + Round Trip(7 races) $1,400 = $2,280
-----------------------------------------------------

So, when I look at each of my horses, I would like to see them earning quite a bit more than $2,280 a year -- as that helps pay for vet fees, breeding fees, ect. I like to see my horses earn at least $20,000 by the end of their 3 year old season, after that, then hopefully they can at least earn double that $2,280 minimum every year.
This to maintain their own yearly expenses plus help out at least a little with other expenses. One horse making a profit of $2,280 a year doesn't sound like much but it adds up if even the worst 50 of them in my stable are doing so - as that's $114,000 out of them.

Stormy

[Gwayne's World]

It's embarrassing for me to read how meticulous some of you are in managing your finances.
I spend money like a drunken sailor on liberty!
My best friend in the game is the 'exchange!'
Good thing I'm only interested in having a small stable?
Hope this helps Tony, in what NOT to do?

[Dylan Christensen]

It's embarrassing for me to read how meticulous some of you are in managing your finances.
I spend money like a drunken sailor on liberty!
My best friend in the game is the 'exchange!'
Good thing I'm only interested in having a small stable?
Hope this helps Tony, in what NOT to do?

Man I related to this a lot. Must be a Nebraskan thing!

[Laura Smith]

If a new player is intent on breeding, I believe it is important that they breed to stallions that will provide value. These are usually stallions somewhere in the middle, $10-20K (I thinking mostly mixers). You probably won't get a freak but should get a useful horse and useful horses always tend to show a profit. Chances are they don't have the mares to breed to upper echelon type stallions when the chances of achieving a profit is significantly less.
Having a barn full of bad horses by breeding to bargain basement stallions and/or breeding to top stallions with less top mares will bring the new player quicker than anything to bankruptcy.
I know new players are constantly told this: " Don't breed until you have a very comfortable bank balance and a steady stream of income."

^^^this.

I'm very often surprised to see how willing people can be to spend 50k+ or more on a stud fee for a mare with very little pedigree or race record. Should you theoretically breed to the best stallion you can afford? Sure. But being able to afford the stud fee at the time you pay it is one thing, and being able to afford losing most of that investment (in the generally likely event that your foal turns out crappier than average) is another... especially if you make a habit of breeding average mares to top-tier stallions... your long-term losses will snowball pretty quickly.
If an $80k hypothetical stallion gets, say, 45% allowance or better foals, a $25k stallion puts out 35% and for 15k you maybe get around 30%... Where do you think you have the best chance at a positive ROI? It's not hard for even a bad horse to make back $15k, but 80k is a big ask for anything that comes out below a mid level allowance at best... which is still 50+% of horses sired by Mr. Expensive over there. And you can bet that, unless you get really lucky with the slide, if you have an average mare, the chances are good that your baby will be on the slow side of the spectrum.

There is so, so much value to be found in the middle tiers, you just have to look a little harder for it.

[Erin Erskine]

I LOVE Stormy's note on an average yearly cost per horse - That is 100% something I am going to keep in mind!

I personally don't run my barn as a business, for the most part. Like Lucas said, it's a game!
However - I do add a note to every horse in my training and racing barns, that's simply just the money I spent buying/claiming/breeding said horse. As so: "Cost: $???" And, once they have earned more than this I add "(complete)" beside it. Only after that do I see my horse as earning!

[Art K Stables]

Run it however you like, the results will tell you all you need to know if it’s something you want to change, I wasted a lot of time until I found something I was comfortable doing, the less you put the pressure on expectations the better chance you’ll have if sticking around to give yourself the chance to find what works for you. I’ll never be wealthy in the game because I don’t care as long as I have enough to have a few talented horses, works for me

[Lee Tuttle]

It's embarrassing for me to read how meticulous some of you are in managing your finances.
I spend money like a drunken sailor on liberty!
My best friend in the game is the 'exchange!'
Good thing I'm only interested in having a small stable?
Hope this helps Tony, in what NOT to do?

Man I related to this a lot. Must be a Nebraskan thing!

X3 The Nebraskan thing.

I personally try to use my claiming race profits to cover stud fees. And I am beyond guilty for throwing unproven mares at Allonsy and other pricy studs. But the long game of it is that I get 3-4 stakes DR fillies every season when all I had previously were crappy unproven mares. I even got a freak last go around. The long game that I see is that these stakes fillies should hopefully be star and blue hens down the road. Breed those to top studs and hopefully a few more Freaks show up. At least that is how I try to play the long game with DR thoros.
I still make a couple deposits each season to help cover costs, but it seems to be less necessary each season. I have a bit over 3 mill now and almost all of my formidable or better mares are bred.

[Dylan Christensen]

It's embarrassing for me to read how meticulous some of you are in managing your finances.
I spend money like a drunken sailor on liberty!
My best friend in the game is the 'exchange!'
Good thing I'm only interested in having a small stable?
Hope this helps Tony, in what NOT to do?

Man I related to this a lot. Must be a Nebraskan thing!

X3 The Nebraskan thing.

I personally try to use my claiming race profits to cover stud fees. And I am beyond guilty for throwing unproven mares at Allonsy and other pricy studs. But the long game of it is that I get 3-4 stakes DR fillies every season when all I had previously were crappy unproven mares. I even got a freak last go around. The long game that I see is that these stakes fillies should hopefully be star and blue hens down the road. Breed those to top studs and hopefully a few more Freaks show up. At least that is how I try to play the long game with DR thoros.
I still make a couple deposits each season to help cover costs, but it seems to be less necessary each season. I have a bit over 3 mill now and almost all of my formidable or better mares are bred.

Us Nebraskans are something else at least it’s working out well for you Lee

[Rebecca Rose Hepburn]

I am NOTORIOUSLY bad with money, to the point where my accomplishment is not having to borrow money to finish breeding these last few years, and it's been some time since I found myself in the red. One of the best things I can suggest is to really research stallions. I'm guilty of just going by first year gallops and nothing else but honestly we should all be looking at a stud's first crop. So many of them get soooo many junk mares so the way you need to look at them is if they're able to improve a junk broodmare and how many of their crop was out of just dud mares.

[Tony Baker]

Thankyou Regina for posting the article here and its been great to read everybody's thoughts. Am really looking forward to racing and learning more next year.