Only buy your horses from the Hooves of Fire breeders early in the game. Then try to breed your own horses to improve your stable by breeding your best stallions and mares.
Buy stallions and try to breed them. Breeding your own horse using a stallion and mare that you own doesn’t cost anything. The most expensive horse you can buy from a breeder is $130K, but you can potentially breed horses worth many millions.
If you buy a good horse from a breeder, buy from him again.
Don't buy geldings, buy stallions and mares and breed with them
If a stallion is unsuccessful at stud or racing, then consider gelding him.
If you purchase a player sold horse, choose one for a higher price than what you have sold your horses for. There is a 10% mark up on prices in the horse market so you want to ensure you are getting a better horse than what you have sold.