VinylSoundsBetter
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Student-Friendly Entry Level Setup Help (~$500)
commsysman
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$500 is pretty restrictive for a whole system.

I suggest that you consider the Harman-Kardon 3390 receiver for a starter. It has a very good power supply and amplifiers, and a built-in phono preamp (so you will not need to buy a separate one). It runs about $320 from Amazon, and that is a great unit for the price.

I would also suggest that you get a pair of Wharfedale Diamond 10.1 speakers for $349 from Music Direct.

Alas, that is $700 altogether.

I would go ahead and get the 3390 receiver for a starter, and if you have to go to some cheaper speakers to start with, so be it.

There just isn't much worth buying for under $350 in the receiver or integrated amplifier area, so get the H-K 3390 first, and go from there.

There is a pair of speakers that you can get for under $60 from Amazon that are supposed to be incredibly good for their ridiculously low price; the Dayton Audio B652 speakers. I would get those to start with if the price of the Diamond 10.1 speakers are going to break the budget. Stereophile did a review on them a few months ago, so you can pull up the review right here on this website.

Ariel Bitran
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you could get some AudioEngines ($199 or $399) and then an inexpensive phono preamp for around $150.

Music Hall PA1.2 MM/MC Phono Pre Amp

NAD PP 2i Phono Preamplifier

Pro-Ject Audio - Phono Box MM - MM Phono Pre-amplifier - Black

But this system limits the amount of sources you can include. 

*****

OR

I'd recommend finding a receiver somewhere on craigslist or ebay for under $100. Then get yourself some cheap speakers. I'm listening to the Dayton's at home right now, and they sound pretty darn good for $40! Although, I've heard reports that new models have a different tweeter and construction, but those reports have not received any sort of official confirmation yet. Or the Music Hall Marimbas ($350) which sound killer, and then get yourself a cheap phono preamp if your used receiver doesn't already have one (the older ones usually do). 

DLWyattjr
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I would look hard on the used audio market.   With some patience, it is possible to acquire very good stuff, provided you're willing to audtion.   High-end entry level speakers from say PSB or NHT are rare, but it is fairly easy to acquire a decent reciever from Denon or Yamaha for under $100.   Then spend the rest on speakers like the  Wharfedale Diamond, PSB Alphas or the Music Hall speakers reviewed in this month's issue. 

But I want to make one other comment, take care in how you mount your turntable.  Good turntables are ideally mounted on the wall, or something really solid so you don't have to tiptoe around.   Some care making sure you turntable has a firm, immobile base will really pay dividends. 

commsysman
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The Pioneer BS-22 speakers got a very positive review in the current Stereophile, and Amazon has them for under $100 per pair!!!

That should be a good choice for you. 

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