How to become filly rich

Kiplinger's Personal Finance Magazine, Sept, 1998

Carolyn Freiman likes watching the races almost as much as she likes watching her two grandchildren. Freiman, 56, of East Amherst, N.Y., has been around tracks since before she could walk; her father raised horses and was part owner of a racehorse. But she never considered owning a horse until the spring of 1997, when a friend asked if she'd be willing to pony up $1,000 with a group of about two dozen turf fans.

Freiman had no illusions that she'd be investing in another Secretariat. She wanted a little fun and an excuse to socialize. So when her partners purchased a mare named I Think Not, Freiman's expectations were modest. Would she win a race? Freiman thought not.

A DARK HORSE. Her skepticism was justified. Most racehorses don't gallop fast enough to pay for their hay, let alone the $20,000 to $30,000 it costs annually to train a horse. In fact, the average racehorse earns just 40 cents to 45 cents for every dollar spent on training.

I Think Not was selected by Harlan Abbey, the managing partner of Freiman's limited-liability partnership. Abbey had spotted the horse in previous races, in which I Think Not had won $130,000 over five seasons. The horse had recently developed ankle trouble, but Abbey was gambling that, with luck, she could continue to win. Freiman's group bought the six-year-old in May 1997 for $16,000 at a claiming race--the most common type of race, at which every horse that participates is for sale.

At I Think Not's first race for Freiman's group in June 1997, the thoroughbred finished fourth on a rain-soaked track in Fort Erie, Canada, across the border from Buffalo. The race was six furlongs--racetrack lingo for three-fourths of a mile--and the muddy track slowed the horse, a sprinter. Freiman watched more with relief than excitement, and her group came away $700 richer.

In her next race, I Think Not ran on a dry track at Fort Erie, another six-furlong race but with a richer purse of $25,000 in total winnings. The mare came out of the seventh gate in the seventh race--and erased a sevenlength gap to beat the leading horse on the last stride in a photo finish. Freiman and her group won $15,480. "I was dumbfounded," she says.

As a reward for I Think Not, Freiman had a florist create an arrangement of apples and carrots. And the horse's trainer promoted the mare to the more prestigious Woodbine racetrack in Toronto.

At Woodbine in July 1997--in a claiming race of seven furlongs, or seven-eighths of a mile--I Think Not edged into the lead and held on to win by a neck in another photo finish. Freiman and her partners took home a purse of $8,400.

THE TALE END. Just as Freiman's group had purchased I Think Not at a claiming race, another buyer bought the horse after the race in Toronto, so Freiman and her partners avoided paying stiff boarding costs during the winter off-season. As it turned out, I Think Not's ankle acted up after the Toronto race and she hasn't been able to race since then.

After paying expenses of about $7,000--including silks, boarding costs, and race-entry and jockey's fees--Freiman and her partners ended up with about $31,000. Last June they spent $17,000 for another thoroughbred, Silks of Gold, to follow in I Think Not's hoofprints. In her first race for the partnership in July, Silks of Gold finished out of the money, and Freiman's goals remain modest. "I want to be part of a fun group with a few stories to tell," she says.

But owning a pony did prove unexpectedly exciting: "I got to claim the winnings on my tax return."