Agree a lot with PH. 500HP for a street engine is probably going to be somewhat leaning towards a "race" engine and moving out of the street cruising engine.
To many people are more concerned about HP numbers when you would be better served to shoot for torque numbers. Assume 500HP is just some arbitrary number you selected. To get these numbers, the costs will be high and you can do it, but you are looking at aluminum heads, aluminum intake, roller cam, professional built/prepped Q-jet, better ignition, headers, etc.. And, as PH pointed out, expect to upgrade your entire driveline to match the extra torque and HP, so that will also become an added expense. My guess, if you have the 10-12k, or more, to invest, then go for it.
However, anyway you go, your parts must match. Get one wrong, and you will have a disappointing engine, or one in which you invested a large sum and don't get the full potential out of it. That said, you might want to nail down a better idea of what you want within a specific RPM range. Do you want a smooth bottom end to mid range, mid range to upper, or upper range RPM engine. Your cam is what determines where your power range will be. You have to give up one aspect of the engine to get the other. Think Ram Air engines. No true street manners at the bottom end, but mid to upper RPM's is where it came alive. That's why they needed the 3.90 & 4.33 gears and close ratio 4-speeds so that the RPM's were kept where the engine was designed for. You would not be cruising on the highway at 65 MPH with this combo.
Next are your head selections. CFM flow is important, because this can/will effect your engine's responsiveness. With small ports and higher velocity, you will have a great kick in the pants acceleration at lower & mid range RPM's, but HP will drop off due to the fact that they will not flow as well at upper RPM's. But this can be improved with porting & a good valve job. Buy a set of aluminum heads which flow more CFM's out of the box and you might experience that the bottom end RPM's are a little sluggish, but mid to upper RPM's are explosive. In all cases, the heads must be matched to the cam or either could be bad performers with the wrong cam. Again, you want to have an idea of where you want your power band to be, then match trans converter (if automatic), trans gearing, rear axle gears, and tire size to the engine RPM you want to get the most out of your engine.
Cubic inches rule, but not always. As an example, you could have a 400CI spinning 6500 RPM's with iron heads, or a 461CI running out of steam at 5500RPM's. The 400CI would be built for mid/upper RPM's while the 461CI would be built for lower/mid RPM's. The 461 would produce more torque and you might have traction problems keeping tires glued to the pavement. The 400CI might be a little slow on the bottom end, so you need a higher stall converter which means more slip/heat at lower speeds. It would really pull at mid/upper RPM's, but this means your engine has to run in mid/upper RPM's to run its best - and that means more wear at these upper RPM's. That said, my personal pick would be the 461 going for a realistic street engine that will hold its own, be driveable, have more than enough torque to fry tires, and cruise without breathing hard. 3.36 gears may actually be too much for the 461CI (which you could drop by going to taller tires) and you could opt for a set of 3.08's for a real highway cruiser and still have the torque to move right along. BUT, I love the high winding sound of any engine and a 6500RPM shifting 400CI is also appealing to me.
As you can see, not just a simple answer to your question because there are a lot of variables that go into selecting what you want your car/engine to do.