When does the law diminishing returns kick in?

The point of diminishing returns is dependent on your ears, bank account, and priorities. Do you find yourself saying, "I wish I listened to more music?" If so, there may be some limitation in your system not delivering a sufficiently compelling experience to command your attention.

I have experienced a couple of upgrades which absolutely compelled me to listen to everything in my recordings collection all over again. Thousands of hours of enthusiastic listening for a few dollars per hour. I'd call that a pretty good entertainment value.

Software is still my largest investment, and finding new joys in that, is a good value proposition for me, sometimes.

People can justify anything they bought, but anyone who spent more than them is just trying to gratify their ego. Of course, that level changes everytime the person buys something new.

Every well thought out purchase is a good move. The law of diminishing returns??? It probably comes in right after the Bose wave machine. All equipment ultimately does the same thing, some pieces just do it better, while others do it a lot better. How good do you want it?

I can't spell his name but the guy from the tv show wherein he says "D-plane/D-plane" was considering suing his local city for building the sidewalk to close to his ass.

Audiophilia is made up of many types of individuals with varying priorities. Realistic playback of recorded music at home is not the end-all of involvment in this hobby.

Some are 'gear hounds' who may never really be happy with their system, no matter what it sounds like. Others are content with just enough gear to create pleasant noises in their environment.

Unfortunately, there is no linear standard for diminishing returns. It depends upon any number of variables. There are incremental improvements or degradations in most changes to a system, including those that don't cost money (cleaning contacts, repositioning speakers, other DIY tweeks.)

My best advice is to take a weekend trip to the big city and listen to as many pieces of gear as you can. How better to know if spending more will increase your enjoyment than by listening?

The law kicks in when you find yourself taking out a second on your house to finance that new cable upgrade.
Enjoy what you have! Depending on the type of music you listen to, it may not matter if your speakers or cd player can't go down to the lowest octave. Or if your hearing cuts out at 12Khz why pay for that new ribbon tweeter add-on?