I've been away from Audiogon for a while. Nothing has changed.
Lots of good common sense advice. Lots of people with 'x' many years of experience in complete and bitter disagreement about the exact same things in every post here with other people with 'x' many years of experience.
So why not throw my hat in the ring? I don't have 'x' number of year of experience or golden ears by the way.
First, I think Hi-Fi and Mid-fi are perfectly reasonable terms despite having no real concrete parameters. Yes, they are fluid but they can get us in the ball park.
I have an extremely nice system at home. Inherited it. Love it. I have a very nice but more modest system in another room featuring Aerial Acoustics 6Ts. Love it.
At my cabin I have a used NAD integrated and a pair of vinyl wrapped Polk Audio towers all of which cost under $400 total. I love the way this system sounds. The sound stage is frankly amazing.
This leads me to several conclusions, most of which have already been mentioned:
1. Listen to stuff. If you can't then experiment. Find out what makes you happy.
2. The room matters. My rooms at home are not ideal. There is surely a cost. Not enough to matter much to me but in the case of my cabin the speaker placement is a lucky bit of good fortune as they couldn't go anywhere else. But I am certain that's why the Polks sound so good. Do what you can with the room you have.
3. Don't doubt that you can put together a mid-fi system that you will like unless you think you are acoustically unpleaseable or simply want to get on the audiophile gear treadmill.