The first modification you should do, assuming you have a fuel injected 5.0, is to remove the air intake silencer. It is located under the right front fender behind the air filter box. You can remove it through the air filter box opening into the fender. Removing this silencer is well documented to give you 3-4 additional horsepower and it is totally free other than a few minutes of your time. Your car will also sound better (meaner) at the same time.

          After removing your silencer, you should advance your timing by a few degrees. It doesn't take much to make a big difference in the way the car responds (more power!). It will require running better gas in your car, preferably premium. It is well worth the difference. The better the gas, the more you can advance your timing. The more timing, the more power your engine will put out. This is why all the really sporty cars require premium gas from the factory. Basically, advance your timing (turn the distributor clockwise) a little bit and then drive the car for a while. In particular, listen for engine pinging (detonation) and track your gas mileage. If the car pings, back the timing up (turn the distributor counter-clockwise) a little bit. Engine pinging can destroy your engine in short order if it is not controlled, especially if you don't have forged pistons. Your gas mileage should also stay roughly the same. If you run premium gas, you will reach a point (by advancing the timing) where your gas mileage will suddenly go down quite a bit. That's an indication it's time to back the timing up and keep it there (unless this is for a dedicated race car). You will be very happy with the results and the cost again is free, except for burning better gas.

          The next modification you should do in the pursuit of more power is to add a set of underdrive pulleys. For under $100, you can add 10-12 horsepower to a stock engine, by far the cheapest 10 horsepower you can add to your car, and they are relatively easy to install. They come in either aluminum or steel with aluminum being slightly more expensive, but also being lighter in weight (which is always an advantage). Do not run "race" pulleys on a street car. Your engine can overheat and your power steering will not operate correctly. If you have a high powered stereo, either don't change your alternator pulley or add what they call a "power amp" pulley to the alternator which will help the alternator put out more amperage. Underdrive pulleys will not affect your gas mileage. The 10-12 horsepower gain is also well documented.

          Probably the next modification you should do to make your car quicker, is to change the rear axle gear ratio. This will not add any power to the car, but it will directly multiply the torque your engine delivers to the rear tires. It will provide more "seat of the pants" improvement than nearly any other modification you can do for the price and should make spinning tires a very easy feat. Most factory Mustangs came with 2.73 gears with a few having the optional 3.08 (5 speed) or 3.27 (auto) gear ratios. Probably the best all around street gear ratio is the 3.55 with the 3.73 being another popular ratio. My recommendation for most cars is the 3.55 for 5 speed cars and the 3.73 for automatic cars, unless you do a lot of highway driving. The gears will cost you from $150 to $200 with installation costing the same amount for a total setback of about $350, installed. Do not attempt installation of rear axle gears unless you know what you are doing. This is not a simple task and requires specialized tools. Don't forget to change out the speedometer gear at the same time or your speedometer will be off quite a bit. The 3.73 gear ratio is the maximum you can go and be able to correct the speedometer with changing only the driven speedometer gear (easy to change) versus having to change both the drive (difficult to change) and driven speedometer gear. I installed a 3.55 gear in my 5 speed car and my city mileage did not significantly change, but my highway gas mileage did go down about 3.5 miles per gallon.

          After this, it is time to make some decisions on exactly what you want your car to do, and which route you want to take to get there. There are basically 3 options: nitrous, supercharging, or normally aspirated. You can add 100 horsepower to your car with nitrous for about $1000 total, but you will always be limited by needing to refill (and paying for) the bottle(s) after just a few runs. You can also add 100 horsepower to your car for about $3000 with a supercharger. A supercharger is always there, but does add some wear and tear on your engine. You can also add 100 horsepower (or so) to your car by changing out the heads, intake, etc. for about $2500. This last method also has the advantage of being able to do it one step at a time, but you won't get the full effect of some of the changes until nearly everything is done. You can also do just some of the third option, but you won't get the advertised power gain by changing, for example, just the throttle body and little else. You will however, gain some power and be able to notice it after you change the part in question. There are two other options I did not mention before and they are stroking and turbocharging. Stroking can add 40-50 horsepower, but basically requires an engine rebuild, so unless you are ready for that, I would wait on this one. Turbocharging is generally more complicated and trouble prone than supercharging, though it has improved a lot. Supercharging is much more common which means when you need help, you will be able to find that help (parts and guidance) much easier than with turbocharging. Turbocharging done correctly is easier on the engine than a supercharger.

          It is also time to think some about your suspension. The Mustang suspension desperately needs improvements to handle increased power. High on the list are subframe connectors, heavy duty rear upper control arms, and boxed (or tubular) rear lower control arms with polyurethane bushings. You should consider rear lower control arms with modified pick up points or a torque arm to increase traction. Either can dramatically improve traction, something the Mustang seriously needs, especially as horsepower is increased.

          Take time to rethink, what do you want to do with your car? Do you want an everyday driver, a street car, a weekend only car, a road race car, or a drag race car? They require vastly different set ups and you need to plan accordingly. I personally like a dual purpose car, a car that is quicker than most on the street, but that can also take corners at breath taking speed. Driving on the street, you have more opportunity to take advantage of a fine handling machine than you do a quick machine, at least without having the friendly law enforcement officer follow behind you with those flashing lights that mean you just lost a bunch of money. When have you (or anybody you heard of) ever gotten a ticket for going too fast around a corner. Most of us have experienced getting a ticket for going too fast otherwise. Still, by far the more popular modifications are drag race oriented, and you just need to make your own choices. Just remember that balance is very important, regardless of which type of car you want. Also, always wear your seatbelt, it may save your life, or help prevent serious injuries. I know from personal experience.