The way I look at it is there is no problem with your expenditure on gear being much higher than on software, and that it is not necessarily a trade-off decision. Over the last 20 years my income and stereo have improved a lot, but the rate at which I buy software has not. I have always bought somewhere between one and two albums a week. Realistically, buying at any greater rate is silly - unless you are a collector or if you have a lot of time to listen to music. I don't believe you can do justice to your software purchases if you try to consume at a faster rate than this. You could of course buy three or four a week and discard two or three after the third listen, but that is still maybe six hours or more of listening on the discarded ones, let alone the one or two you keep, let alone the albums you bought the week before that, and the week before that, etc. So my point is that I reckon you should be setting your level of consumption in line with how much time you have to listen and how much you like to explore new albums as opposed to your existing collection. If what money is left over only allows you to buy a $5,000 system, then so be it. But if what is left over allows you a $100,000 system then so be it too - no need to waste money on albums you will never do justice to.
New Music vs. New Equipment
I assume that many people are like me in that we are always looking to optimize our audio systems. Unfortunately, to do so can require spending thousands of dollars. Furthermore, when all is said and done, the system sounds better, but it's never going to sound like real musicians playing real music. At what point is it better to leave the equipment alone and instead purchase more music? As an example, will I be better off spending $2,500 on new bi-wire cables, or should I buy 125 (@ $20 each) new albums? The new cables have the potential to make the 2,500 albums I already own sound marginally better, yet 125 new albums should yeild some great music. Which way should I go?