Buying a new car typically doesn’t make the list of best personal finance practices. That being said, we all know that, and whole bunch of us still end up doing it. IF you’re going to buy a new vehicle in the coming years, look no further than the Ford Fiesta. Here’s 6 reasons why:

1. The Ford Fiesta’s Price is Incredibly Competitive

A while back, I highlighted the top 10 cheapest new cars of 2010 (with automatic transmission). In case you missed it, here’s a brief recap of MSRP’s.

1. Nissan Versa: $12,710
2. Hyundai Accent: $13,715
3. Toyota Yaris: $13,905
4. Kia Soul: $13,995
5. Kia Forte: $15,390
6. Kia Rio: $15,390
7. Scion XD: $16,270
8. Honda Fit: $16,410
9. Scion XB: $16,420
10. Nissan Cube: $16,750

The Ford Fiesta wasn’t on this list because it debuts as a 2011 model. The MSRP for the 2011 Ford Fiesta sedan model (with auto transmission) is $14,390. Should the above list stay about the same, that would put the Fiesta firmly in the #5 spot with its price point, and only $600 out of the #2 spot. For an American car, with all of its legacy costs usually included in the price, that is unusually affordable.

2. American Made Quality is Back

In last year’s JD Power Survey, Ford was even with Toyota (long viewed to be superior to American manufacturers) for initial quality. More recently, Ford surpassed Toyota in overall quality perception in a survey of 150,000 potential car buyers. Of the top 7 (shown below), Ford also owns a controlling share of Mazda, who made #3 on the list. 5 years ago, who would have imagined the 4 out of the top 7 non-luxury vehicle brands in terms of quality perception would be American?

1. Honda
2. Buick
3. Mazda
4. Volkswagen
5. Saturn
6. Ford
7. Toyota

3. Ford Fiesta is the Most Fuel Efficient

My look at the top 10 cheapest cars also included EPA mileage estimates. If EPA estimates did not change from this model year to next, the Ford Fiesta would be the #1 most fuel efficient vehicle at 30 mpg city and 40 mpg highway, of the top 10 cheapest cars.

4. Ford is Profitable Again – your Warranty is Good

Ford is back in the black. They ended 2009 with a profit of $2.7 billion, which blew away estimates. Market share is gaining, and the company appears to be on the right path. Unlike GM and Chrysler, Ford did not need to be bailed out by the U.S. Government. Their prospects for surviving, and even thriving are excellent at the moment. You do not need to worry about Ford’s business being in trouble and them not being able to honor your warranty.

5. Did I Mention Ford is American?

Yes, I know that many foreign vehicles sold in the United States are actually made in the United States. However, that doesn’t mean that profits are kept and re-invested locally. What’s good for Ford is good for Detroit and is good for the American economy.

Believe it or not, I have zero affiliation whatsoever to Ford. No friends, no family, no monetary relationship. The closest affiliation I’ve had with Ford is that I used to work for a non-profit in Michigan, and the #1 and #2 corporate givers and volunteers were Ford and GM, even in the years when their futures both looked very bleak. How much did we receive from Toyota, Hyundai, Honda, and others? Nothing. Score another one for Ford.

6. The Fiesta is a Cool, Sexy Little Car

We’re not chatting about a bugly little piece of crap. The Fiesta doesn’t evoke thoughts of vomiting such as the Chevy Aveo, Honda Civic, Toyota Camry, or just about anything from the Hyundai/Kia lines. It’s a pretty good looking little car with a cool look to it. I wouldn’t feel the least bit ashamed or embarrassed to drive one.

Interested in Buying a Ford Fiesta?

If you reserve a Ford Fiesta before April 2 of this year, select models will come with Sync, navigation, and premium sound at no extra charge. When you reserve, you are under no obligation to purchase and don’t have to put any money down.

Ford Fiesta Discussion:

• Have you reserved a Fiesta? Are you planning to?
• If you’re going to be getting one, why did you decide to?
• If not, what vehicle are you going to be purchasing instead and why?

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So why is it considered a catastrophe when housing prices drop?

Last week, I asked you to identify the cultural assumption in this screenshot. Here’s what I was thinking of:

Isn’t it funny how “home prices falling” is assumed to be a bad thing?

You never know how American your assumptions are until you go to another country. That’s because in the United States, we have been systematically taught that housing is a good investment and that prices must go up. Ask your parents why they bought their house. One of the top 3 reasons will almost certainly be, “It was a good investment.” Yet I’ve shown very clearly that for many people in many situations, it is not. In fact, housing is often a terrible investment.

Yet the illusion persists, whether it’s my friend wanting to buy a million-dollar house with no research, or people saying things like, “I wish I’d bought more real estate” after incurring a paltry 1.2% return rate over several decades.

As a result, you get media reports that implicitly echo the cultural assumption that housing is a good investment. The way they describe the housing market — oops, “housing recovery” — influences and reflects our cultural assumption. Let’s take a look at a headline from a major national news publication:

Interesting…it’s a “housing recovery” when prices are getting expensive. Would you say that with toothpaste?

Also interesting: Why is it a painful decline when young people and other first-time buyers get more affordable housing?

Alice in Real Estate

What if we discard the assumption? Let’s try: For each of these screenshots from major media sources, I’m including the opposite cultural assumption below it.

Or…prices could become more affordable for young people

Or…prices reach a new level of affordability

Affordability grows for first-time homebuyers

Housing market bargains continue for young people, first-time homebuyers

As Warren Buffett said in his 1997 Chairman’s Letter to Shareholders,

“If you expect to be a net saver during the next 5 years, should you hope for a higher or lower stock market during that period?

Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall.

This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.”

Why “higher house prices = good” persists

Deep-seated beliefs like this exist for multiple reasons. What might some of them be?

1. American culture believes that home ownership is a right that everyone should have (it’s not).
2. Since most newspapers are written by and read by older people — whose wealth is predominantly (and mistakenly) tied up in their houses, it only makes sense that real estate prices “should” increase. As a result, you see words like “recovery” and “crash” rather than “bargain.”
3. Unlike toothpaste or other commodities, there are ancillary effects of changes in real-estate prices. If one house price declines in a neighborhood, there are spillover effects that affect nearby houses. This is why neighbors and realtors will do anything to prevent a house from being sold at a low price, including throwing in things like cars and TVs instead of lowering the list price.
4. Crooked organizations like the National Association of Realtors and banks use every trick in the book to prevent house prices from actively reflecting the market price. Remember how, in Chapter 6 of my book, I described example after example of how Wall Street firms use disingenuous tricks like survivorship bias to obscure how poorly performing most of their funds are? The same is true of real estate. Where there’s lots of money in commissions, there is virtually always shady behavior, obscured facts, and whispered promises that never turn out to be true.

In fact, this cultural expectation goes to the very highest levels of the U.S. government. In a speech, President Obama said:

“This plan will not save every home, but it will give millions of families resigned to financial ruin a chance to rebuild,” Mr. Obama told a crowd here, in one of the communities hardest hit by the housing crisis. “It will prevent the worst consequences of this crisis from wreaking even greater havoc on the economy. And by bringing down the foreclosure rate, it will help to shore up housing prices for everyone.”

It’s fascinating, but unsurprising, to hear the President’s explicit goal is to “shore up housing prices for everyone” — and, you could argue, maintain unaffordably high rates for most young people.

It’s not that simple

For young people, every time the market goes down, you should be cheering for your own individual finances. You can acquire investments at lower prices and you have a long time for the market to grow.

Yet, paradoxically, lower housing prices do represent a clear risk to the American financial system, whose growth is predicated on consumer spending, which is in turn strongly influenced by housing prices. That’s why this crisis is so serious and confusing. (See the President’s full remarks here.)

Just because virtually every media presentation decries the “rapid decline” in housing values doesn’t mean that applies to you. “Higher house prices = good” is a cultural assumption.

You can read more on my page about real estate investing.

* * *

What other money assumptions are there?

I’ll start:

• People who have money waste their money (also known as “It’s OK when I spend my money on something for fun, but not you” — see comments)
• Immigrants are better at money than you are
• People who spend $20,000+ on their weddings are dumb (same as above — see comments)

What money assumptions have you noticed?

Work/life balance in the form of supportive national and employee benefit plans is something that the United States has sorely lacked, especially in comparison to other developed economies. Corporate lobbies have made it so.

Nowhere (other than health care benefits) is that more apparent than when looking at maternity and paternity leave. Let’s take a look at how we stack up against the rest of the world.

Here are Some Interesting Parental Leave Figures to Consider:

• The U.S. is the ONLY country in the Americas without a national paid parental leave benefit. The average is over 12 weeks of paid leave anywhere other than Europe and over 20 weeks in Europe.
• Zero industrialized nations offer no parental leave other than the U.S.
• Canada recently passed legislation to boost paid parental leave (shared between paternity and maternity) from 10 to 35 weeks, in addition to 15 weeks for maternity.

Depressed yet? Let’s Travel to Europe to See how they View Parental Leave.

• Lithuania offers 52 weeks at 100% pay plus 52 weeks at 80% pay to be split between the parents however they would like!
• Denmark – 52 weeks.
• France – 16 weeks at 100% pay for first child and up to 26 weeks for third child. That’s on top of an amazing 104 weeks of unpaid leave (your employer is required to let you come back to your job).
• Norway – 56 weeks paid.
• Sweden – 480 days paid.

Yikes. OK. What About Impoverished African Nations. Surely they Don’t Offer Paternal Leave, do they?

• Ethiopia, with its gross national income of $859 per person – 90 days at 100% pay.
• Madagascar, with a gross national income of $911 – 14 weeks at 100% pay.
• Somalia…. gross national income of $600 – yeah…. 14 weeks at 50% pay.

Wait, I Got you! Afghanistan! There is no Way Afghanistan Offers Better Benefits than us, Right??

Afghanistan offers 90 days at 100% pay. I kid you not.

What to Make of All This:

If you’re an expecting mom or soon to be father in the United States who is actually getting paid leave from your employer – be thankful and take it. Take all of it. And enjoy it. Do not feel guilt as a result of backwards cultural values. You deserve that time to enjoy your new family and settle.

If you’re thinking of having lots of kids some day. Well, start writing your congressman/congresswoman or begin looking into green cards.

Maternity & Paternity Leave Discussion:

• What’s the longest maternity/paternity leave in the United States that you’ve seen? How long?
• What about the shortest?
• Have you actually considered moving to a different country to enjoy the benefits of things like paid paternal leave or universal health care?

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I won’t lie, the back-end of 20somethingfinance has been JACKED UP over the last few months. I haven’t been able to focus on content as much as I would like, but things should start picking up, as I have done a lot of fixing up and I’m nearly done. Ultimately, the changes should result in a much better reader experience. If you’re curious, here’s what went wrong and how I’ve fixed it.

You may have noticed:

Broken links: I altered my permalink structure on the site, which shouldn’t have, but did result in a number of broken internal links. I went through every single post I’ve written, and all broken links should now be fixed.

Slow site speed: I upgraded to a dedicated server from shared in order to speed up the site and prevent it from going down (which it had done twice in the last few months). I have also done a lot of website optimization in order to speed things up.

The two most popular caching plugins, W3 Total Cache and WP Super Cache, both resulted in making my site buggy. The site is image and plugin heavy to add to the user experience, so it’s never going to be lighting fast, but it should be fast enough. I’m addicted to speed though, so if you have any recommendations on caching or other site speed optimization plugins, please share in the comments.

Site was down this week, 3 days of comments wiped out: My web host made an error in the transfer from their shared server to a dedicated server. In the process, the site was down for a full day. The host had to go back and use an earlier version of my website, which wiped out about 3 days worth of comments this week (hence, some of my newer posts having no comments). I apologize if your comments were wiped out.

Broken looking posts: I changed the theme layout a bit, which resulted in the flow of a lot of the posts looking like crap, so I went back and re-sized all images in all posts to make it reader friendly.

RSS feed was not re-directing to FeedBurner: If you had problems subscribing to the RSS feed before, you should not any longer.

Despite all That:

Site comments, readership, and visits are higher than they have ever been. And I’m looking for more. I will be doing some heavy guest posting in the blogosphere in the coming months – and as always, I could use your help in growing the site. If you get value from 20somethingfinance, recommend the site to your friends and family by sharing some of the ‘connection’ links below.

If you See Anything that Looks Broken:

Please contact me and copy the URL and the problem that you noticed. Thanks!

Connecting:

If you like the site and want to connect further, there are a number of ways to do so:

Connect on LinkedIn.

Follow me on Twitter.

Become a fan on Facebook (I just started this page, so I need fans! Expect more new content there soon!).

Get Content Delivered to You:

Other than coming to the site, there are 3 ways to get new content delivered to you:

Subscribe via Email

Subscribe via RSS

Subscribe via Kindle!

Ready to rock and roll!

Maybe I’m in the minority here, but I still do (and proudly) subscribe to a few magazines – and I won’t be stopping unless the magazines close shop. My personal favorites are Kiplinger and Backpacker.

That being said, I get awfully tired of magazines and magazine agents that rope you in with a low introductory offer (usually 12 issues for $12 – or something similar) and then ‘conveniently’ increase your subscription price for you through auto-renewal.

What’s worse is that a lot of these introductory offers are through non-legit distribution channels, and you might not even know it. What follows is a simple process that I follow to keep my magazine subscription prices low and avoid magazine scams.

How the Magazine Subscription Industry Works

I have some personal experience with the magazine industry and here’s a little background on how they and some of the other players in their industry work:

1. Magazines make almost all their money from advertisements. No big surprise here.
2. Advertising revenue is driven by subscription numbers which influence how much a publication can charge for ads and what advertisers the magazine can attract.
3. In order to drive up subscriptions (and ad revenue), magazines are often willing to completely subsidize the cost of the subscription itself. They work directly with a number of agents who will usually get most or all of the cut on the subscription user cost.
4. There are ‘rogue’, or unauthorized, magazine agents out there who go through subscription clearing houses. Go through these guys and you might not see your subscription for months, or ever. They generally give the industry a bad name.

When Signing up for your Magazine Subscription:

Order either through the magazine’s site directly, or through a legit magazine agent. How do you know if an agent is legit? They have direct, authorized relationships with the magazine publisher and offer live customer support. Magazines.com and Magazineline.com are two good ones that clear both of these hurdles. The last thing you want is to have your personal information sold and/or not receive any subscription at all for the false promise of saving a dollar or two.

How to Get Cheap Magazine Subscriptions (and Keep them Cheap):

Finding discount magazine subscriptions is not that hard. Usually the publisher will offer the lowest authorized price on the magazine subscription that is out there. If you see someone offering lower, there is a good chance they aren’t legit. This should be your starting point.

Now that you have your cheap subscription, the challenge will be to keep it cheap. The magazine publisher usually will automatically begin scaling up your subscription price with each passing renewal. Most of the time they don’t even tell you that it is an increase.

This REALLY makes me mad. Why? For starters, the publisher is saving money by the fact that you are subscribing through them versus elsewhere (remember my earlier point about agencies taking almost all of the cut?). In subscribing directly through them, you are raising their subscription margins. How do they thank you for that? Through higher subscriptions!

Avoid the Magazine Subscription Renewal Bump!

So when your magazine renewal subscription price gets bumped, what should you do? Cancel. And go with an agent, or just re-subscribe through the publisher with another introductory offer (they never stop offering them). And when they raise your price on renewal? Cancel and start fresh again.

It only takes a few minutes of time and it keeps your cost low. Magazine subscription costs can add up quickly if you don’t keep things under control. The only downside  to this technique – you might miss an issue. Oh well, most magazines are online for free these days if you’re that upset about it.

Cheap Magazine Discussion:

• How have you kept your magazine subscription costs down?
• Have you been scammed by a rogue magazine agent? What happened?
• What agents have you been happy with?

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Click for larger image

This is the third installment off my ‘Start Retiring Now, by Getting Paid to do what you Love’ Series. In the first post, I offered up a bit of motivation to start exploring your own interests and in the second offering we discussed the concept of marketable hobbies and what it takes to get paid for doing them.

In this post, I’ve provided a list of 55 services broken into 11 different categories where there is a heavy demand that originates from common human priorities. I think you’ll find a common theme in all 11 categories – these are all things that people value highly and pay good money for. If you’re good at it, you could turn it into a successful business. Even if you’re just average at it, it could result in a nice side income.

But let’s take baby steps here. I think the main point that I want to get across is that you love doing things, others need people to do these things for them, why not you – even just as a trial?

You’re not going to love all 55, but I can bet that you love doing at least a handful of them.

Some may require formal education and training, others require certification of some sort, but many do not require any formalized training or certification at all. I purposefully included services that do not require a 4 year degree. Enjoy, share, and comment below!

Pets: They provide so much joy in our lives that many of us are willing to pay good money for things that we think will keep them happy and healthy.

1. Pet comforting (visitation and feeding while owner is away)
2. Dog training
3. Dog walking
4. Pet grooming
5. Pet psychology

Autos: One of our most cherished possessions. We are willing to spend a lot of money on a very frequent basis to keep our autos healthy and looking good.

1. Auto mechanic
2. Auto detailing
3. Auto customization
4. Taxi/limo/chauffeur
5. Auto restoration/build

Food: We all need to eat. And we want to eat food that tastes good and adds to our overall life satisfaction.

1. Growing and selling produce
2. Personal Chef
3. Coffee
4. Restaurant
5. Specialty gourmet offerings

Website Services: Website production and marketing is a necessity in today’s business landscape. Skills in this area are highly desirable.

1. Website design
2. Search engine marketing
3. Search engine optimization
4. Website optimization
5. Development/coding

Skilled Arts: From brochure promotion to pottery to 5 and 6 figure canvas paintings – if you’re really good at it, someone is willing to pay for it.

1. Graphic design
2. Computer aided design
3. Screen printing
4. Painting/drawing
5. Ceramics

Homes (Indoors): Our houses are our highest ticket material possession, and we are willing to spend good money to repair, clean, improve, restore, and sell and buy them.

1. House cleaning
2. Home repair
3. Real estate sales
4. Interior design
5. Home staging

Homes (Outdoors): Ditto as above, but this time on the outside.

1. Landscaping
2. Master gardening
3. Snow plowing
4. Growing/selling plants/flowers
5. Siding/Roofing/Sidewalk/Powerwashing

Health: Many of us see view our health as our most valuable asset. We are willing to spend a lot to lose weight, become healthier, fight disease, and prolong our lives.

1. Fitness/personal trainer
2. Martial arts trainer
3. Yoga instructor
4. Nutritionist
5. Rehabilitation

Recreation: Closely tied to health, recreational activities have an enormous impact on our life satisfaction and fulfillment.

1. Backcountry guide
2. River guide
3. Canoe/kayak rental
4. Hunting guide
5. Bicycle maintenance/sales

Event Planning & Service: We want to enjoy life and our biggest life events can be even better with the help of others.

1. Photography
2. Wedding planning
3. Travel agent
4. Catering
5. Travel guide

Other: OK, so I ran out of categories. I don’t think it’s hard to imagine why there is a need for the following.

1. Writing
2. Life Coaching
3. Financial Planning
4. Accounting
5. Catching and selling wild game

Self Employment Income For what you Love Discussion

• What are the top 5 things on this list or on your own list that you think you’d like to make self employment income from?
• Have you started a successful business or made income in any of these areas? Has a friend or family member? How did you or your peer do it?

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