Excerpted from the 3rd edition of Disc Makers revised and expanded Home Studio Handbook.

If you’ve outfitted space in your home for the purpose of recording music, step two is amassing the gear for the task at hand. Here’s a checklist for things you might already have, need immediately, and can put off until later.
Cables
Cables are a necessary component in any studio, but may be one of those things you overlook when considering how to spend your money. There is a wide range of options — a 20′ instrument cable can range in price from $10 to over $200. As a matter of practicality, if you’re outfitting a home studio, spending hundreds of dollars on a single cable is overkill. What you do want to focus on is using the proper cable for the proper function, and not going to the extreme cheap end to save a few bucks.
Speaker, instrument, and microphone cables
An instrument cable is built to convey a weak, unamplified signal. Your guitar or bass is putting out a small AC current with a small voltage — that’s why it needs amplification. An instrument cable is a low power/high impedance cable with one small-diameter (usually 24 gauge) positive wire — typically copper, silver, or aluminum — that carries this weak signal.
The instrument cable is insulated and shielded, or it would pick up noise from external sources that would cause humming or buzzing, and could even pick up radio frequencies. In addition to the internal shielding, there is the outer casing and the 1/4″ jacks that complete the cable. The quality if the material of all of these components, as well as the quality of the assembly, goes into the cost of your cable.
A speaker cable is built to convey a strong signal from an amplifier to a speaker and has two wire conductors, with a relatively large diameter, to allow greater signal flow. Generally speaking, the larger the diameter of the wire, the better the flow of the signal to the speakers. The wires are insulated, encased in a filler, and wrapped in an outer jacket.
A microphone cable is also built to carry a relatively weak signal from the microphone and consists of one pair (and sometimes two pairs) of twisted wire. Those cables are insulated, encased in a filler, are shielded (like the instrument cables to prevent external interference), and wrapped in an outer casing.
Cable choices
Performers may already have found their instrument cable of choice, and they’ll want to use that in a recording situation, but having functional instrument cables on hand is necessary, and buying for quality and longevity are recommended.
For your studio monitors, investing in decent speaker cables is worthwhile, as is buying the right length. Likely, you’ll not need anything much longer than 15 feet, so don’t go buying 50-foot cables to plug in your near-field monitors.
Microphone cables are more difficult to predict, depending on your space and requirements. If you’re recording drums and miking a rhythm section at the same time, you could have a need for 15 mic cables. Length comes into play here as well, depending on whether you need to make it into an adjacent room or not.
As such, mic cables can easily add up to hundreds of dollars. Purchasing high-end cables for every mic in your arsenal is probably not practical, so obtaining high-performance cables for acoustic guitar and vocal mics could be worthwhile, and you can get away with something less expensive for electric guitar, bass, and drum mics.
Preamp
A mic preamplifier is an electronic amplifier that prepares a weak electrical signal, such as that from an instrument or microphone cable, for further amplification or processing. Because microphones provide a low signal, using a preamp is a way to boost the signal before it gets to the recording console. This helps with the purity of the signal as well, as the chance of interference can be lessened. By keeping the sound source close to the preamp using a shorter and well-insulated cable, the amplified source will be cleaner.
Another use for a preamp is software monitoring. If your DAW or computer doesn’t have the processing power to utilize your system’s plug-ins on the way in, or if you’re taxing your DAW’s mixer, you can experience latency issues. Using an external preamp will ease the burden on the mixer and improve your working conditions considerably.
Monitors
When considering what you want from a monitor, consider this: within your budget, you want something that will give you as clear a vision of what you’ve recorded as possible. Some of the less expensive monitors have the byproduct of being colored in one direction or another. You can very easily spend more than $1,000 just on monitors, but if you’re relying on your studio to produce final mixes, there are compelling arguments why they are worth that investment. But if you’re looking for a solid, affordable reference point, you can buy a good pair of monitors and still have room to spare for all the other gear you’ll need.
Unpowered (passive) monitors
Passive monitors need an external source of amplification to boost the signal between the mixer and the monitor. While you may save money on the monitors, it does necessitate the purchase of a power amp. Plenty of options exist, and a search on your favorite gear site will return power amps specifically geared to the task of recording. Make sure your power amp can pump out 50-100% more power than the speakers require. If your speakers are rated at 120 W at 4 ohms, you’ll want a power amp that delivers in the neighborhood of 200 W at 4 ohms.
A power amp in the chain also requires additional cables. A higher-gauge speaker cable (16 gauge or better) is what you need to go from the power amp to the monitors, but you can use 24-gauge cables to go to your power amp.
Powered (active) monitors
Active monitors have built-in amplifiers with separate amps for the separate drivers. Benefits of powered monitors include fewer cables to buy, less space taken up, amps that are perfectly suited to the drivers, and in a good pair of active monitors, the frequency splitting can be more accurate than in a passive system.
When an audio signal is sent to your powered monitors, a crossover splits the signal into the appropriate frequency ranges before they’re sent to the individual drivers, and the cabinet houses an amplifier for each driver. The frequency band splitting is performed on the line input signal directly prior to the amplifiers.
Purchasing the right monitors
A lot of what makes a pair right for you is all about your own preferences. Tweeters and drivers are made out of different materials. Domes can be made of titanium or aluminum, which will be a bit crispy, or Mylar or silk, which are softer. Speaker cone can be made of paper, doped paper, polypropylene, Kevlar, or metal. The enclosure and design of the driver will also contribute to the sound of the speaker (particularly in reproducing bass tone), so hearing a variety of options and choosing the one that best suits your ear is recommended.
Another consideration is having two or more sets of monitors. Being able to A/B from a larger pair of speakers to a smaller pair, for instance, can help give you different perspectives and information on the same mix.
Headphones
Like monitors, quality and clarity are almost synonymous when considering headphones. An excellent set of headphones, from a recording engineer’s perspective, is one that gives a truly clear representation of the recorded sounds without added color or filtering. Consumer-oriented headphones are designed to boost bass and highs and sweep out the mids, which is not what you want if you are relying on your headphones for an accurate mix.
For a mixing and recording engineer, a set of cans that are sealed and that have a flat response are necessary. You can find headphones marketed as “flat response” or “reference” starting at $50, but to step up to mixing quality phones, you’ll find the entry level is probably more like $150. You can spend plenty more than that, and a high-end headphone can cost upwards to $500.
Of course, you’ll need more than one pair of headphones, and what is true for the mixing engineer is not true for the recording/performing artist. Quality phones that cut out external noise will always be valued, but for playback and performance purposes, the artist can get by with something substantially less than reference headphones.
Here, though, is also where durability should be considered. You’ll be sure to take good care of a pair of headphones you dropped $200 or more on, but the cans the artists are using will get significantly more abuse. Cheap cables can cut out, headphones get dropped or pulled off a player’s head by accident, and whipping headphones on and off during a session takes its toll.
One last thing to consider for headphones is extension cables. Being able to feed a long enough line to someone recording a part will require more line than your headphones will provide, so plan on one extension cable per headphone — they start around $10 per cable.
Headphone amp
You’re going to need to feed a headphone mix to various musicians simultaneously if you’re tracking more than one player at a time, and you’ll need to boost the signal fairly significantly if you’re recording an amplified guitarist or drummer. There is a huge variety of headphone amps and mixers on the market, and the price range depends on the number of inputs, functionality, degree of control, and the amount of power you want.
Accessories and extras
Your accessories list can be extremely long, depending on your environment and preferences, but if you’re working with a computer, consider a fader port so you can use faders and pan knobs to control your software rather than a mouse and keyboard.
And like cables, microphone stands and accessories are an expense you might overlook when budgeting for your studio. Boom stands can run around $30 each, and mounting clips for drums, gooseneck adaptors, and a pop filter for vocal recording are items you’ll want to have on hand.
Music stands and guitar stands are also handy to provide your performing musicians and can run from $10-40 each.
Excerpted from the third edition of Disc Makers revised and expanded Home Studio Guide. Download your free PDF copy today.
A musician, writer, and marketer, Andre Calilhanna manages and edits the Disc Makers and BookBaby Blogs. Email Andre at andre@discmakers.com.
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Re your statement that “Your guitar or bass is putting out a small DC current with a small voltage,” it is actually an AC current. If it wasn’t, there would be no musical frequencies (of alternating current) represented.
@Al Hardiman: Instrument and mic cables carry low voltage DC current. Speaker cables carry AC current. The low voltage DC current is the reason pre-amps are needed for mics and instruments.