If you don't have a drum set in your home recording studio and you generally only record yourself then you can likely get away with having just one condenser microphone and one dynamic microphone in your studio. If you really want to get great results then you'll want to choose the Shure SM57 as your dynamic microphone and the Neumann U87 as your condenser microphone. These are the two absolute standards in their respective areas.
First you need to understand which microphone you use for what.
For example for recording vocals you will want to use the Neumann U87 condenser microphone, in fact it's probably the best known vocal microphone in the world. Major music studios all over the place have Neumann U87s ready to go to record crystal clear vocals. And yes there's a huge difference between recording with a cheap mic and a high quality (but not so cheap) microphone like the U87.
You will be able to record all of your acoustic instruments with the U87 as well as your vocals. You may get slightly better results using a small diapraghm condenser rather than the large diapraghm (like the U87) when it comes to recording acoustic guitars but I think you'll be satisfied with your results.
You will need to use the Shure SM57 dynamic microphone to record your electric guitar's amp. Why not just go direct into your audio interface? Because it sounds much, much, better when you record your amp with the SM57. If you are currently going direct in and you don't understand why you aren't getting the sound you want, I think you'll be amazed at the difference.
Now for some good news and some not so good news. The good news is that the Shure SM57 is very affordable. It can be found for about $100. The not so good news is that the Neumann U87 retails for over $4000. But you may be able to find it online for a cheaper price (especially if you get one used and since these are such high quality durable mics you will likely be very pleased with the used mic you buy.)
