What is your upgrade philosophy?

I started off with a very cheap system. Then I put together on paper my dream system and bought one piece at a time. I wouldnt shop so much by what component I wanted next as much as I did by good deals. I kept an eye out for an exceptional price of anything on my list and bought whatever was the best buy.

It was hard for a while because I drove an $11,000 pair of speakers with a $500 amp but after five years it is just about finished. As first when I changed out components the difference was huge. Towards the end it was more of an elimination of small but particular weak points but it was just as rewarding.

Now for home theater.

As an example, I waited ten years to buy my dream turntable. I made do with something that worked while I squirreled away the cash, then finally bought the analog front end I always wanted. I'm a firm believer in not buying "good enough" and upgrade through small steps but biding my time until I get the item of my choice. I'm to a point now where tweaks and such are about all I feel I need to introduce/change in my system. It's fun, inexpensive, and surprising.

I do prefere to upgrade a few components at the same time. For the past year I've had a bunch upgrades with analogue end, speakers and an amplification. Usually I do not pay too much of my attention on wires and buy them for the minimal match first.

I tend to agree with Perfectimage in that you should have a sense of what the final outcome is going to be and pick and choose as "deals" become available and your budget allows. That said, however, there is much to be said as to upgrading your souce components first and then working your way to the last link, i.e. the speakers. The old axiom "garbage-in, garbage-out" certainly applies in audio and what you hear coming from your speakers will reflect this.