Horse Economics. Catherine E O'Brien

first-hand.

      It was a late January evening around 11:30 P.M. or so, and I was washing my face and getting ready to retire when I heard a loud bang outside the house. I didn’t immediately hear it again, so thinking it was the neighbor slamming a trash can lid, I crawled into bed. I had started to settle in when I heard the noise again, three times in a row, and I knew then it was coming from the barn. I shook my husband awake and said, “We have to get to the barn, something is wrong!” We bundled up and went outside where the temperature was around 15 degrees and the wind cut right through us. It was absolutely frigid.

      When we got to the barn, my old gelding, Brio, had been rolling and thrashing, his blanket covered in shavings. He had been as demanding as ever at dinnertime, eaten his grain as usual, and had starting chomping his hay when I said goodnight, but now it appeared he was colicking. I ran back to the house and called my vet, explaining how bad it was and that she needed to come out to the farm. She arrived about an hour later.

      The vet tubed him—a procedure where a nasal-gastric tube filled with mineral oil is inserted through his nostril and into his stomach—gave him a sedative and painkiller, and left more sedative with me to give in several hours if he did not feel better. Even though Brio was in extreme pain, he didn’t offer any resistance, which was unusual for him. He had been abused and mistreated before I purchased him and really didn’t think much of humankind. (In fact, he only considered a few people worthy of tolerating, and fortunately, I was lucky enough to be one of them.)

      After the vet left, my husband and I returned to the house to get warm, checking Brio every 30 minutes until I heard him kicking and thrashing again. We hand-walked him and gave him more sedative and when he was quiet, we again left him so we could warm ourselves.

      We hadn’t even reached the house when Brio started thrashing again, so I made another call to the vet. When she arrived, she gave him more painkiller and sedative, and we made arrangements to take him to the equine hospital a little over an hour away.

      At the clinic, the ultrasound revealed fatty tumors had formed and strangled a portion of Brio’s small intestine. The vet explained this was common with older horses and there were often no warning signs—like a time bomb, only you don’t know the clock is running. Surgery was the only option; however, with the tumors, it would be complicated, and there was no guarantee my horse would be alive when all was said and done. The vet estimated the cost to be $8,000 to $10,000, a total that would run even higher when I factored in the $1,500 I had already spent on the house calls and the follow-up care that would be necessary.

      I wasn’t prepared for this at all. Brio was twenty-six years old, but had been sound and healthy, and he had more fight and spunk than the seven-year-old in the barn. He didn’t look his age and was still heavily muscled. I had even taught my husband to ride him over the last year or so, which they both enjoyed. I had envisioned Brio living another ten years and always thought that I would know the right time to have him put down and bury him on the farm. After all, we had been together twenty-two years, and he had always been there for me, through good times and bad.

      But, there were other factors at play. Nine months before this awful day, the company where my husband worked had changed ownership, and two weeks later, his whole department was laid off. No warning. No severance package. The unexpectedness of the change in our joint income had to impact my decision-making. When you’re financially stretched like a rubber band that’s about to break, there is no room for error.

      Brio’s age, the chance of complications, and the pain he would have to endure, combined with the financial position my husband and I were in, lead me to the decision not to go through with the surgery. In the end, I couldn’t even bring him home to bury him because a huge snowstorm was hitting the area, and there was no way for a contractor to get equipment to the farm. I was crushed. The blanket of white snow made the farm seem even more empty without him.

       Did my decision not to have surgery performed benefit me? No. I miss my horse terribly.

       Did my decision benefit my horse? Yes. He was in excruciating pain and the risks of complicated, possibly futile surgery were too great.

       Did my decision make financial sense? Yes. Choosing to incur a liability (the surgical and follow-up medical costs) with no way of paying for it would not have been a good financial decision, especially when I was responsible for the care and well-being of family and other animals.

      Looking back, I know I made the right decision, but it was not an easy one. When something becomes an integral part of your everyday life and brings you great joy, it is hard to make objective decisions where that “something” is concerned. Emotions, attachment, and pride in caring for an animal all factor in to the decisions we make as horse owners. However, as in my own experience with Brio, financial considerations need to be taken into account, as well.

CHAPTER TWO

       Financial and Risk Management

       Part I

       PERSONAL AND HOUSEHOLD GENERAL FINANCE

      It is probably safe to say you plan and prepare in order to meet your equestrian goals—such as bringing a young horse along or competing at a higher level. It is important that you give the same attention to your personal financial goals. Begin by viewing yourself and your household as a single entity, and then decide what the “goals” for that entity should be—for instance, a corporation’s goals often include maximizing profit and building shareholder wealth. Your goals may include the reduction of debt, maintenance of tangible assets (real property—real estate and improvements—and personal property such as horses, cars, and clothing), and the building of savings and retirement accounts.

DETERMINE YOUR NET WORTH

What is your net worth? You can establish this amount with a chart that lists your assets^♦ and your liabilities^♦. First, write down all your assets: a good estimate of the market value of your home and farm; all cash and savings; any cash value in life insurance policies; surrender values in annuities; the current balance in your retirement accounts that you could withdraw today (less income tax, plus 10 percent); the current market value of stocks, bonds, and mutual funds; the market value of your car(s); and a very conservative estimate of household goods. Don’t include any personal or family items that you would not be able to sell—you don’t want to overstate your assets. Then, list all your liabilities, which are loans or obligations of any type that may include the balance due on a mortgage, car loans, credit card debt, and home equity loans.

      SO YOU KNOW…

♦An asset is something you own—real or personal, tangible or intangible—that can be assigned a monetary value.

♦A liability is a legal obligation or responsibility for an amount that can be measured and belonging to a particular entity.

♦Equity is the money value of property that has no obligations against it.

      Your assets minus your liabilities is your net worth.

A balance sheet gives a picture of your net worth on a fixed date in time (fig. 2.1). In a proper balance sheet,