Law Of Diminishing Returns?

acerbic, smart ass comments aside, i would remind everyone that value and ’returns’ is seen and held in the eye of the beholder

diminishing returns does not mean lack of positive returns, that last few percent improvement may well be worth it for those who choose to pay for it - this applies for many many fine things in life, not just hifi

is a wagyu ribeye 4x better than a choice ribeye, it is 4x the cost, and both fill your tummy, right? ... well if you can afford it, want and appreciate the difference in the pleasure of enjoying the wagyu, then it is well worth it

is an opus one red 10x better than your supermarket yellow tail cab?

is a first class transcontinental flight worth 20x the cost of an economy seat on the same plane?

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to answer the op’s query about where a sweet spot might be in putting together a very good sounding system in a typical listening room, i would say US$5-10 grand if one purchased used gear smartly

The "value" curve may not be linear, but neither is our perception of pleasure. Many try to approach 2ch system building like they’re choosing car insurance. Not me. I get too excited by the nuances of different gear, and what unique sonic perspectives they provide, compounded by their complex interactions with other components.

A few of my most expensive purchases have busted the "pleasure" curve, thereby rendering arbitrary percentages and diminishing returns meaningless. They also tend to stick around a lot longer here than most budget "giant killer" components.

+1 @jjss49 

Perhaps, OP, your rich buddy got rich because he mainly likes spending money, not seeking quality.

I can take a swag at it. A good $12,000 loudspeaker system, a good integrated and decent music player will get you pretty far down the road. Perfect placement, a good room, and picking the right gear, is a darn good start. So just under 20K. 

For me, diminishing returns has as much to do with my check book balance as anything. If there is a surplus in the checkbook it easy for me to fanaticize about the potential aural rewards of getting  a more expensive piece of equipment. If, after acquisition, I can't hear the increase/improvement of sound quality and I have correctly chosen the component,  I still have the bragging rights of ownership and can fib about the improvement it brought. Impress the hell out of the poor folks! :-)