Hi RM9,
I'm probably more of a newbie than you. I have a very low-end system:
1) Pre-amp: Anthem AVM2 (although I've been using a Nakamichi AV8 as the pre-amp / processor and I'm actually quite pleased with it. Surprisingly, despite the MSRP price difference, to my ears given my set up, I think the Nak results in a better experience).
2) Amp: Adcom GFA-5400
3) Source: Sony CDP-X111ES CD player
4) Speakers: KEF C75; KEF Q10 (I'm using the latter more now; mid-high frequencies sound clearer given my equipment and room).
I purchased the Nak, Sony and C75 new (15-20 years ago?). Everything else was purchased used (recently, as my love for music became re-invigorated sans a budget to match). Here is my experience consistent with comments above:
Lesson #1: you can make significant improvements without spending a dime.
The folks here gave me excellent advice. Just by changing my room around a bit helped tremendously -- very noticeable changes in the listening experience. It was not intuitive for me.
Lesson #2: More expensive does not mean better experience.
The Anthem MSRP is about 4x my Nak and is manufactured more recently. Still, given my components and my room, it doesn't make my listening experience better. In fact, it's lateral at best and I think I actually prefer using the Nak as the pre-amp more than the Anthem.
Lesson #3: Music preference, room, etc should influence speaker choice.
I was using my Kef C75 -- larger with more drivers, larger drivers, higher power rating, etc, etc. Should be better than the Q10's, right? Again, given my music preference (jazz and vocals fit for an old timer like me) and my room, the Q10's provide a much better experience. I won't pretend to know what imaging, sound stage, and other esoteric terms mean. But the instruments and vocals are clearer. And if I just listen, my stereo and speakers just disappear. If I walked someone in blindfolded, I doubt they could tell where the speakers where (when sitting in the listening position). Vocals seems to come from a non-existent center channel - more than once, I've gotten up to confirm that the Pro Logic and the Center Channel are off. The C75's sound fine in a larger room, but the Q10's are more enjoyable in my 'music room.'
All told: $400 for the Nak (bought new 15+ years ago), $125 for the GFA-5400, Q10's, cheapo CD player (using the Nak DAC's) -- I'm probably under $500 for the system bought used today.
Is it perfect? No. I'm sure I can get a much better sounding system through experimentation and cost. But as long as you try to avoid the upgrade bug, I agree with others that you can get an enjoyable listening experience without spending a lot. More than budget, I think it's important to establish what is a good enough listening experience. These days, I can't afford to chase diminishing returns. I justify every $100 I spend on improvements.