I see hundreds of posts asking for bike recommendations by people that are new to cycling that want a lot of bike for not a lot of $ dollars $. I agree that you have to be wary of the $'s but many let the $ limit drive their bicycle purchase decision.
It's not reasonable to request a bike that you want to use for commuting, road racing, touring, and cyclocross 'cuz you're really going to "get into cycling" and you're going to ride this bike everywhere and put thousands of miles on it, it needs to be reliable, weigh less than 20 lbs, etc., etc., etc.... Oh... and the budget is $700!
I may be different than others, but if I say I'm going to "get into a sport or hobby" I define what it is that I want to do with the sport and let my purchasing decision be driven by my goals or objectives rather than a $ dollar $ limit. I'm happy with my purchases. Yes, they were way more expensive than what I wanted to spend and it was even a little uncomfortable handing over the cash but, I am absolutely elated with the bicycles that I have purchased. And, I am "into" cycling at my original goals and objectives.
I have an accounting/finance background. The way I see a bicycle purchase (or vehicle) is that this piece of equipment is something you plan to use for 15-30 years (i.e. if you are really "into it") and I amortize the cost of the equipment over that time period. So, a good quality bike amortized over 15 years is as follows:
$1000 = $5.55 per month
$2000 = $11.11 per month
$5000 = $27.75 per month
$10,000 = $55.50 per month (is this a typical health club monthly payment?)
My objectives were never to race, I think it's easy to get to the $10,000 level with that objective. My main objectives are commuting/club rides/fitness rides/one or two-day distance events. I had to buy two bikes. That took me to the $5000 level or... about 28 bucks a month - something I feel I can afford for an activity that I am "really into."
How do you think the decision should be made on how much you should spend on a bicycle???