The Hi-Fi Budget

I was planning on writing up a post where I offered what I thought would be a reasonable way to spread out one's overall hi-fi budget by category. Speakers get X%, amplification Y%, source Z% and so on. Essentially creating an order of importance. But the more I wrote, the more tangled up my logic got. So I emailed a few friends whose opinions I admire and trust, and they confirmed my idea was pretty stupid since there's a near infinite number of roads to hi-fi happiness. Creating a percentage scale creates a totally arbitrary and needlessly restricted path. Boom.

Since we only talk about pieces of the hi-fi puzzle on AudioStream, we obviously ignore the most important aspect of any hi-fi—system building. When we review a $1,000 USB cable, for example, we review a $1,000 USB cable. Does it make sense to buy one to connect your $50 DAC to your computer? I would say no, it doesn't. If it was me, I'd take that overall budget and spend most of it on a new DAC and with the remainder buy a USB cable. Cables do not alter the basic personality of a system, in my experience, rather they can enhance its qualities. In terms of system building, I'd make sure I have my speakers and all of my components and room treatment sorted before buying cables.

When buying a hi-fi from scratch, I'd start out by finding the speakers I most enjoy (i.e. love!) and let my budget trickle down from there following system connectivity. So speakers first, amplification next, source, and so on. But that's just me.

If we look at my main system, it looks like this:

Pass INT-30A & DeVore Fidelity The Nines = $13,650
Auralic Vega, MacBook Pro, Synology DS412+ NAS = $5540
Room treatment, cables & other = $3000
Here's the rub. I've reviewed a lot of gear in the past nearly 4 years. There have been a few components that have truly knocked my socks off (see the list). If I could have any one of them back, I'd pick the totaldac dual-dac which costs around $12,000 and I'd stick it right into my current system and live happily ever after. Of course this would completely blow up my tidy little percentages. Boom.

Let's talk about Ethernet cables since we can't seem to stop talking about Ethernet cables. In my setup I use an Ethernet cable from my router to a switch (AQ Cinnamon), from the switch to my MacBook Pro (AQ Vodka), and from my NAS to the switch (AQ Vodka). These cables are .75m and 1.5M so the combined cost is $677.

Would I recommend that everyone in the entire world run out and buy $677 worth of Ethernet cables? Of course not. What I have recommended and continue to recommend is anyone using Ethernet in a network-attached hi-fi should buy good quality CAT6 or CAT7 Ethernet cables. I also recommend trying the Audioquest Ethernet cables for short Ethernet runs, which start at $25/0.5m since I've had very positive results using them. Since you can try these cables for free for 30 days, there's very little risk associated with trying them. So sites like Ars Technica and HotHardware can take my actual recommendations and report on the facts for a change of pace. The truth. Try it, you might like it (but you won't draw as many clicks or comments from angry IT guys).

Back to our system approach. For a network-attached hi-fi, I would buy my speakers and components first, my NAS, deal with room treatment, and then buy cables with whatever's left. But that's just me. Would I buy a $10,000 Ethernet cable, ever? No, I would not. Would I ever recommend buying a $10,000 Ethernet cable? No, I would not. Have I ever recommended anyone buy a $10,000 Ethernet cable? No, I have not. There's that ugly truth thing again.

If I had a budget that allowed for a $10,000 Ethernet cable, I'd consider taking Ethernet out of the equation altogether by buying a server with built-in storage. That said, I would not want to live without Roon/Tidal Hi-Fi so Ethernet remains in my system-building equation.

Of course there are a million other ways to slice and dice this computer audio/server/streamer equation and each of us will have our preferred method. No harm, no foul. If your hi-fi allows you to enjoy your music as an event in and of itself for as long as you care to listen and leaves you wanting more, you have the best hi-fi regardless of cost.

CG's picture

Room first.

Short story... Wife and kid turned up with a fancy new TV set a couple weeks ago. After removing the incumbent 200 pound set from behind and between the two speakers and placing the new set in place, we realized that the new set doesn't really have analog audio outputs, like most TVs of today and unlike the last set.

So, while awaiting the right widgets to connect the new set to the audio system, we were left to listen to the TV's internal speakers. These are actually pretty good for a TV set, but they are pretty good for a TV set.

Well, guess what?

The "sweet spot" is the same size and in the same location as with the audio system speakers. This was especially surprising because the audio system speakers use first order cross-overs and driver time alignment, which are reputed to be quite sensitive to listener height and floor placement. The soundstage isn't nearly as deep or nearly as wide, of course. But, this clearly shows the effect of the room.

So, I'd get the room right first. It doesn't have to cost an arm and a leg, either. A good part of the solution is determining the best speaker and listener placement.

Then, on to the power system.

Always start with a good foundation...

Michael Lavorgna's picture
...OK more than a few years, I visited someone to hear their hi-fi. He had hired Rives to treat the room. He eventually changed speakers so Rives came back and re-treated his room for his new speakers. So my thought is to get the speakers you like, set them up in your room, and then deal with room treatment.

It seems to me that different speakers will make different demands on your room treatment. Or do I have this ass-backwards?

CG's picture

I'm *hardly* an expert on this subject. What I know is from college physics and from reading on the subject. That works for my home use, but only makes me dangerous otherwise.

It does seem to me that the room geometry is the room geometry, which determines the peaks and nulls for the bass response. You can change how you pressurize the room based on speaker placement. (The height of the acoustic center for the woofer is part of that equation, too, unless the room your system is in has a REALLY high ceiling or the system is outside in your yard) You can also sit and listen in a spot where the response is relatively flat. You can reduce the "Q" of the room by using properly placed acoustic treatments.

Beyond that, you can only control the reflections of the midrange frequencies. This is certainly affected by the speaker radiation pattern, so perhaps that's why Rives came by again. Or, perhaps the customer was anxious and most profitable consulting companies don't often turn down billable hours...

My thought is that unless you get the room more or less right, you are adding a lot of variables and impediments that can get in the way of those speakers doing well. Put another way, whatever you invest in getting the room right is at least equivalent to whatever you might spend on speakers. Maybe even electronics. What did Charlie Hansen suggest - That he thought set-up was 50% of the system performance? I might have the percentage wrong, but it certainly was a large number.

Michael Lavorgna's picture
...went from large Maggies to large Kharmas. So yea, they certainly offered very different radiation patterns.

But I agree - the room and speaker placement are essential. Maybe I should write something up on treating my room....

CG's picture

That would be great to read.

REW is great donationware that can be used with a low cost calibrated microphone and some sort of USB interface (like a Focusrite Scarlett 2i2) to measure your room as you progress. There's also all sorts of spreadsheets and free calculators available on the Internet to help calculate room nodes.

Perhaps not the same or as good as having a professional do it, but you can do pretty well in a normal sized listening room. Way better than just guessing and dinking about. Better for readers, too...

VK's picture

I'm looking foward to it!

Best regards!

ktracho's picture

What I'd like to see (since I'm hoping to go to a show next month) is a mini-competition where you have multiple groups of people putting together systems with a given budget, and then people can go and hear each of these systems, and get some ideas on how they should spend their money. (Faced with a fixed budget, some may splurge on one component or another, which would make things interesting for show goers.) Otherwise, it's a guessing game for people who are non-reviewers.

Frank Hardly's picture

I think cables and ancillary stuff forms a bigger part of the budget once you've committed to the big visible stuff. My upgrade trajectory has in large part been influenced by what I can sneak past my wife - she has an uncanny ability to sniff out uncommunicated upgrades. Cables and other tweaks are easy to get by her esp. My system consists of a Hugo, Cary SLi 80 and Monitor Audio PL200's. A recent upgrade to an Audioquest Diamond USB cable went completely undetected :)
So far I haven't been gelded.

Hugo450r's picture

because speakers seem responsible for most of the emotional response.

Hugo450r's picture

that after this years Newport show I've become infatuated with Naim amplification.

Michael Lavorgna's picture
The speaker/amplification pairing is best done by ear.
24bitbob's picture


Great article, I especially liked the bit about $10,000 Ethernet cables ;-)

Speakers: In 1977, I bought a pair of Tannoy Cheviot loudspeakers, they cost me GBP 300, but they have the wonderful Tannoy Dual Concentric drive units (I bought them at the time before AlNiCo magnets became prohibitively expensive). I've lived in 8 or 9 countries in 4 continents, and these speakers have come with me wherever I've gone (moved home I mean). I've had the roll surround replaced once, and both speakers re-coned once. They outlived my first marriage. A few times I auditioned other loudspeakers, but nothing under $10k would make me consider parting with my Tannoys. They have been my main speakers since 1977, ........ but I replaced them not two months ago.

Aesthetically, they couldn't keep up with the Devialet I bought, so I made the emotional decision to replace them. Yep, I bought Tannoys again, but this time the DC10's. They cost about 20 times more than my original Tannoys, but I'm not sure they sound even 10% better. I've still got my Cheviots, and nothing will make me want to sell them.

I couldn't agree more: get speakers you love, and build your system around that. 38 years with one pair of speakers is pretty cool.

Michael Lavorgna's picture
Great story, thanks for sharing. I've had an opportunity to listen to a few of the older Tannoys and a pair of Wideband Churchills and have always been impressed. I own a pair of Altec Valencias (c1967) going on 8 years and use them in our family room system.
"Aesthetically, they couldn't keep up with the Devialet..."
Aesthetics are certainly an ingredient of my hi-fi buying as well.


dysonapr's picture

$22K? Are you married?

Michael Lavorgna's picture
Soon to be 21. That's only $1k and change per year ;-)
Bromo33333's picture

The biggest comments I see is not about how to divide a budget towards parts of a stereo, but the right way to build a system that can minimize cost and maximize benefit.

The issue that keeps the "high end" (for lack of a better term) in a niche is the perception that you need to drop the price of a new car to get a satisfying result.

While you do need to spend some money, there are ways to get great sound for less than many think, and while some who have no budget for one reason or another (other uses and priorities, or just don't have the cash) will feel left out, I think people would be pleasantly surprised that in the last decade, the "price of entry" has actually gone down, even as new strata opened up at the tippy top.

So I'd ask for rules of thumb on how to figure out how to put a good system together that would be cash efficient regardless of the budget level.

(Because you can have an awful system that costs a lot, too!)

Michael Lavorgna's picture
My next column in Stereophile talks about three recommended desktop systems (active speakers + DAC) including a $469 system.

Some hi-fi shows have asked exhibitors to put together lower-priced systems I believe in the $1500 range. While this is a step in the right direction, I'd like to see and do more to support the fact that the hi-fi we own and enjoy is the best hi-fi to be had.

In terms of AudioStream, we have recommended DACs starting at $149 and climbing all the way up to over $30k. This makes perfect sense to me since our job is to cover the market. Yet some people take the fact that we recommend a $30k DAC as off-putting, to put it politely. Some get angry.

I will give some time and consideration as to how to best approach your recommendation, " to figure out how to put a good system together that would be cash efficient regardless of the budget level."

CG's picture

Back to my room pitch...

I've always felt that the popularity of headphone systems - not modern day Walkman devices with ear buds - often has to do with the practicality of it all. No room acoustics to deal with. No power amps, or at most power amps on a much smaller scale. That also reduces the basic mains electrical considerations by quite a bit. All this dramatically reduces the overall cost and impact on the rest of the room mates.

Of course, while very good unto itself, headphone listening by its very nature is really a different form of music listening. Not saying it's better or worse, just different.

Anyway, unless one can get past the basic environmental challenges, I'd suggest that headphone listening is the pragmatic solution. If one wants a loudspeaker based system, best to address the environment first. $100k speakers in a poorly applied room space is an expensive experiment probably doomed to underachievement, if not failure.

Also, given the often fickle nature of audio consumers, there's a ton of used gear out there. When set up properly, this gear can often blow away newer more expensive systems for a surprisingly moderate price tag. Why not take advantage of other consumers inability/reluctance/stubbornness in setting up their system for your own satisfaction? If they want to throw money at a solution that is doomed from the start, let them. It's a free country, more or less. (That isn't to say that all expensive gear is not worth it. But, buying a new Ferrari to drive on the rutted roads in your back 40 during the winter may not be ideal.)

Tis even better if you can wield a soldering iron and use a voltmeter, just like back in the days of the Stereo 70 and the Harmon Kardon Citation 12. That way you can restore other people's refuse for your own or improve upon designs that may have some design, ahh, compromises that may not be to your liking.

Most people buy used houses and often change them to their liking. HiFi can follow the same path.

Reed's picture

I have Magnepans. I recently purchased sounds panels that are on stands, so I can move them. The stands are wood grids with absorption behind them, so they are mainly refractive with absorption properties. I thought I had everything perfect until I picked up these panels and started shifting these panels around the room. The difference in the sound when moving these panels a seemingly insignificant amount is fascinating.

I think the speakers are the most importance aspect of the system. If the speakers are electrostatic or rear ported....then room treatments are of increased importance.

If I could choose a component that I wish I would have never sold, it would be an Ayon Audio Tube CD player I owned some time ago.

Jorgen Skadhauge's picture

I would say that after the room, the speakers are the most important thing in an audio system.
I bought a pair of Quad ESL 63 in the mid eighties, they costed a fortune, but now 30 years later I would rather call the Quads best speaker bargain ever! I have for lot of years used the OCOS cables for speaker/amp connection.

To me it seems risky to put to much money into whatever digital, sorry Michael, as standards and software,chips and so changes too fast.
Having said this I have till now invested in a Proceed CD player, a Meridian 508/500 CD transport/converter and a TacTaudio TCS, so I learned the hard way ! - and I think I one day could be stupid enough to buy the Totaldac, hmhm..
I use a Squeezbox, which I think was a fantastic bargain as a digital transport....
For cables I think Eichman is a good no-nonsens solution.

These days I am in the buy for the best amp to drive the Quads.
Amps on my wish list is the new Thrax hybrid, the new PS AUDIO BHK amp, the cheap Constellation amp or just a 3D LABS nano amp mono block, class D and not very expensive. They are build on the danish Pascal modul.

ggagne's picture

As far as I'm concerned, it should go this way:
1/3 for power conditioning and cables
1/3 for analog equipment
1/3 for everything else

Nyal Mellor's picture

To me it is pretty simple. Choose the speakers first, then design the room around them. Every speaker has a different radiation pattern (off axis response) which changes how the room should be treated. I have written a number of articles about this subject - please see on my blog for more.

The reason those two are so important is that they massively change what you hear. Speakers and rooms are the two pieces of the audio system with the largest frequency response errors. If you want to hear what is on the recording then you'll get well engineered speakers and treat your room appropriately. This is the same approach that Soundstage magazine recommend, and many experienced audiophiles believe the same.

After that you choose an amp to match the speakers. The amp should be able to drive the speakers, and so things like power output and impedance matching are important.

Then comes the source components and everything else such as power conditioning.

Generally at least half the budget should go on the speakers and room. Amplification is, I think, pretty cheap. You can get amazing amps like NCores for $3000 which can drive 95% of speakers out there. I definitely hear differences amongst different DACs, but you pass the value knee pretty early on for those and the law of diminishing returns kick in.

I have no problem running a $3000 amp and a $5000 DAC into a $30000 speaker.