Unfortunately the ways to get money which in turn gets better horses is either buying crap mares 1st year and breed them and sell their offspring the following year or bet on the horses and close the game before it auto saves.
I usually go for the crap mares breeding and turning a profit with yearlings, though your bank account may get low while waiting for the season(s) to turn over. I try to base my bets (without cheating/closing) based on recent 3 race performances + current odds. Its taken ~7 game years for me to finally breed decent stock to compete in G2/G1s. It is a bit of a grind to get there, but the feeling of finally winning feels great.
I'd also recommend to check sales (even weekly ones) regularly while starting a new game. I've stolen some young upswing horses for 100k (80-90 PRs but the game is telling me they are improving every start) and I notice the AI primarily bids based off of pedigree over current talent. The 100k's were from non-graded pedigree but obviously showing early potential.

Good luck!