No matter if you're trying breed prize worthy race horses, breed for pretty colors, or sell horses with bad stats, or that you no longer want, the main rule is never sell a horse or turn a horse to pasture without breaking even or turning a profit.

Never auto sell a foal or even right away an adult, the price will be always way under the breeding fee alone you paid to get that horse. Doing this constantly in the long run will just eventually burn your money even though you might be selling dozens of horses/foals. Most show horses will eventually pay back for themselves, as you use them over and over in races and higher level shows. However you might have horses you want to use for only breeding, or for a short time, which is why its important to track the lifetime winnings of all your horses.

Keep in mind the breeding fee or the buying price when getting a new horse, or breeding one. During the foal years, keep in mind all the money that went into feeding if you were auto-buying items or not. If you want to keep precise, you might want to keep a note pad and pen. I go by a general rule that each horse I breed will cost me roughly 400k, as I auto buy quite often, which is my base limit before I sell a horse. I usually sell/pasture my show or breeding horses at 2 million earnings, to make up for the training, breeding and jockey fees, as well as my personal time invested in them.

You can keep track of how much money you have made on a horse by looking at its lifetime winnings. Before I sell any horse or put to pasture, I make sure they have made me at least 400k. The more the merrier as it is pure profit past that point.

The fastest way to get a horse to 400k lifetime winnings will be from the cross country games.

Training horses you plan to sell as soon as possible is optional, it will come with more cost invested but also they will generally sell higher as well with more training. I would suggest only investing in speed if they are struggling in leveling up and completing missions, even in cross country. However I found most horses above 3 stars, but with little to no training, will have little issue completing even the higher level cross country competitions on time, even with terrible stats.