I've been debating about getting a simulator for years, and finally decided to go for it, after spending literally years researching the topic. From what I've gathered, how much is reasonable to spend on a setup is totally dependent on your goals. There are countless stories about people doing incredibly well in sim racing with a bare bones setup, because how fast you get at sim racing is not dependent on how accurately your setup replicates the experience of driving an actual car. But the OP's first post asked about how well practicing on a sim translates to driving a real car on a real track, and for that, my conclusion is that there is no way around spending a lot of money. No sim will reproduce the g forces felt in a real race car, so you have to rely on gear that does the best possible job of replicating the other sensations. So at a minimum, you need a high end wheel base, pedal set, and either triple monitors, or VR. You need a wheel base that gives you the same sensation of kickback and resistance you get when riding the curbs, so at a minimum, you'll need a high end belt driven wheel, like a Fanatec Clubsport, which is around $550. But to really get the purest sense of feedback, nothing compares to a direct drive wheel, so I bit the bullet and went with a Podium DD1, which set me back $1100. For Pedals, the Fanatec Clubsport V3 is a good value at $360, and the performance kit, which gives you the degree of pedal firmness and feel you get in a car, is the best $30 you'll spend on your setup. Nice curved 27" monitors can be had these days for about $220 apiece, plus $350 - 500 for a free-standing stand. I say free-standing, because I also got a Butt-kicker transducer to replicate the vibrations of a race car, included when shifting gears, so if the monitor stand is attached to the cockpit, the Butt-kicker will shake the monitors. A computer capable of seamlessly driving all this is a minimum of $2K, and then there's the cockpit itself. I saved some money here and went with a GTR Simulators GTA Pro, which was only $675, including the seat, and while it's a decent cockpit, it really falls short in the stability of the pedal base, so I had to spend a lot of time figuring out how to reinforce it so it wouldn't flex under hard braking. Someone with decent fabrication skills could probably save a few bucks with a DIY rig, but by the time you pay for the materials (unless you make it out of wood, which a lot of people have done), I doubt you'd save much.
As far as adding motion, that seems to be starting to enter into the realm of reality, too. I've seen reviews of add-on motion systems in the $3K range (vs. $15K and up for earlier generation full motion rigs) that have completely blown away the experienced sim racers testing them, so once I get acclimated to my set-up, that may be something consider at some point down the road, along with VR, once I'm satisfied that technology has sufficiently matured.
Everything I say above is only theoretical, because the completion of my setup was rudely interrupted by the failure of my track car's torque tube bearings, but I should have the rig up and running in the next few days. But this is my first foray into simulators, so I won't have anything to compare it to. But again, from everything I've gathered, if your goal is to get good at sim racing, a very inexpensive, basic system is all you need. Ditto if your goal is familiarizing yourself with tracks you haven't driven on before. But if you want to use your sim as a training tool, including online coaching, you have to invest in a rig that gives you as many of the sensations (short of the g forces) of driving a car in anger on a track as possible, and sadly, that ain't cheap.