ANNANDALE, N.J. — “When you are really good at something, you like to stay in that space,” said Jean Good, Wealth Management Advisor at Northwestern Mutual in Annandale, N.J. For equestrians, that space is usually at the barn. But when it comes to financial management or investing in their own future, many good horsemen balk at the idea.
The horse business is physically risky, of course. It is equally financially risky: cash flows tend to be irregular. Many self-employed equestrians don’t regularly take a salary which minimizes income taxes but has other negatives. When a big payday comes along such as the sale of a high-priced horse or winnings, the money is often used to pay off debt or buy a new truck or a new horse, but no portion is invested for the long-term.
Likewise, those on their way to becoming a millionaire by starting with $10 million and then buying horses can benefit from the expertise that Good provides.
Good’s job is to help people understand how to smooth out cash flows, enjoy the present and keep an eye on the future. Sadly, some highly successful trainers have no choice but to continue working much longer and harder than they’d prefer. They are living in the moment, not thinking long term.
Good has experience working with horses and horse people having worked in commercial breeding for more than 15 years. Other financial advisors may not understand why anyone would eat instant noodles every night for dinner, while spending $5,000 on a new piece of tack. The financial decisions of a horse owner or trainer are often driven by the top priority of looking after the animals — their own needs come second.
There is also always the possibility that a horse business operator may no longer be able to physically do the job. If a horseman is injured, what happens to the horses, the business, or their family?
Most equestrians view their involvement in the horse industry as a lifestyle, Good said, and thus they don’t view their retirement in the same way as someone who works for a major corporation.
- How much income does a horseman need to maintain the lifestyle?
- What are the overheads involved in running the operation?
- How are an equestrian’s own animals a drag on profitability?
- How many clients do you need to make a profit? A
- nd what do you need to charge them?
- What happens if there is a large unexpected expense like colic surgery? How much of your monthly expenses are supported by the business?
These are the questions Good helps her clients to address. Most horsemen are “surprised at how much they should have,” Good said.
Likewise, they are surprised at the variety of financial tools available and how they can work together to create financial security. Insurance is one of these tools — it helps to protect an equestrian’s income earning potential. Cash, savings, and investments are some of the others.
Each of these has plusses and minuses and a holistic plan will use them in a way that’s customized for her clients. This is a step by step process that begins with education and demystifying the tools which can be confusing and a real barrier to taking action.
Take a few minutes, reach out and learn how Jean and her team can be a resource to you.
Contact her at 1322 Rt. 31 N., Suite 1, Annandale, NJ 08801, call 908-617-0552 or cell 908-310-9556, fax, 908-238-1050 or http://jeangood.nm.com/
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