The answer to this question probably lies in how much money you presently have. It would also depend on the confidence in your ability to either monetize or flip the domains you purchase. Every day I hear people say “If I had a little more money I would buy that” but really, would you?
The fact that most domainers don’t have a lot of extra money to put into domains most likely is their saving grace. If they had more money they would probably make terrible buying decisions so it’s better off that they just keep doing what they are doing, not making much but not spending much either. It’s easy to get caught up in auctions or personal likes and dislikes that lead one to spend more on a domain than it’s worth. Domains are not trophies. They are tiny little businesses that either need to be developed or flipped.
My answer to the question would be 250K. Why $250K? Most of the domains I would buy and sell are in the 10-20K price range and $250K would give me plenty of money to build my portfolio. I would like to see a return of $25K and that’s possible because I return half that with a $50-60K portfolio. Money makes money and presently I can get 5% interest safely and 10% if I am a bit riskier so I set this as my benchmarks. This is the least I expect from a domain purchase. If I don’t think I can get a 10% per annum return on my domain investment I’ll put my money elsewhere.
In reality I would put most of it into my brick and mortar business because I can make much more money by investing in it but what fun would that be?