The cheapest way to upgrade is ALWAYS to just sell what you have and buy the more upscale bike. And if you want to actually get into racing the bike then you need to get both components and a frame that will be up to the job. Even if you are only going to do this for fun you'll hate yourself if the bike isn't up to the job to at least make you feel good about your efforts after crossing the finish line. Plus just the fact that you're looking at wanting to race suggests that you tend to be more aggresive on the trails even for a fun day's outing. Again that suggests that you want a bike that is more tuned with parts and geometry to suit this manner of riding.

As you've said the 4300 is pretty basic. Not only that but it's got a compromise geometry. If you're racing you want a bike that is set up more agressively with a longer top tube and a cockpit that encourages you to lean forward in a more racy crouch than a sit up Sunday trail tour position that the 4300 comes with. And by the time you upgrade all the things that need it you'll easily be into this bike for the cost of the better bike that you should get. But you'll still have a frame with a "Sunday casual ride" sort of geometry.