Whether you're trying to stick to my hypothetical PS4 budget for a sim racing PC, or building the best monster of a gaming rig you can, there are a few things you should prioritise when it comes to hardware specs.
The end goal is a consistent frame rate, and one that your display or displays will be capable of showing (a 60Hz TV can't show any more than 60fps - frames a second - whereas 120fps is probably a good goal for sim racing on suitable monitors, meanwhile virtual reality - VR - typically needs to be supplied with over 90fps to avoid triggering software trickery that actually drops it to 45).
You also want to keep the latency low. At 60fps, the time one frame is displayed for is 16.67ms (milliseconds). If you're able to get 120fps (and have 120Hz or above displays) that halves to 8.33ms. But if you add some render latency from the GPU (graphical processing unit) on top of that, along with a (hopefully very low) input latency for the display, and a slight latency with your wheel as well, it adds up and you notice the wheel on the screen having a slight delay.
There are tricks to improve these numbers though. One is capping the frame rate to keep the GPU's latency low, the other is lowering the visual effects or resolution to keep the frame rate up (and there's nothing stopping you turning them up for replays later).
When starting from scratch building a gaming PC from an empty case, you're more than likely to use the ATX standard. That now comes in multiple sizes but the one you're most likely to use will be an MB (motherboard) of 305x244mm, and a full-size tower to fit it and the GPU, and to generally aid cooling (although there have been some pretty clever 'sleeper' builds using a 15-25 year old ATX case and tricks like liquid cooling).
You kind of need to start with the GPU and build something that will support it. The case will need to fit it, the power supply will need to be strong enough for it (as well as power the rest of the system, although using MSI Afterburner or another utility to undervolt the GPU is a neat trick to reduce its power draw and heat), and you want the MB and CPU to take full advantage of the GPU's PCIe x16 bus speed (which for GPUs released in the early 2020s is generation 4.0).
It really depends on how many pixels you plan to display (multiply the resolution by the number of screens) as to how high-end you should go with the GPU. It also depends who developed the racing games or sims you care about most as to whether AMD or Nvidia will perform better at any given price point (eg. Codemasters seems to favour AMD, while Kunos seems to favour Nvidia).
The next thing you need to choose is the CPU. For sim racing you don't want integrated graphics taking up resources, and you want one that prioritises single-thread performance. It doesn't need to have the most cores and threads, or even the best clock speed. You want it to perform the primary task best, rather than sacrificing a bit of that for multi-tasking (which is what productivity-oriented CPUs do).
Also look at the amount of level 3 (L3) cache in the CPU. You don't necessarily need AMD's 96mb of stacked L3 in the 5800X3D, but the more L3 the better when rendering 3D worlds and performing the calculations for lots of moving objects within them.
Another factor is a lower power draw will increase the chance of air cooling being sufficient (assuming the CPU is good enough that it isn't going flat out when you're driving).
You then choose the MB, because while a standard ATX size will fit any brand of full-size case, it will only be compatible with a small subset of CPUs. So not only do you need to know which brand of CPU you want, but also which socket it is for. After that you can look at the MB's features and what it will support in terms of expansion, sound quality and so on. You also want to activate dual-channel RAM (for high memory bandwidth) and to fit the fastest RAM sticks that are compatible with both the CPU and MB.
Now you can choose the right case.
Finally, an NVMe SSD (solid state drive) in an M.2 slot will give the quickest load times, but the way PCs work at the moment that time is a bit more dependent on CPU performance. That said, they're not much more expensive than a quality SATA 3 SSD.