Chop the onions, garlic, and yellow Hungarian bell peppers. If you cannot get Hungarian peppers, you can use yellow bell peppers or yellow banana peppers.
Take a deep pot, put the oil in it, so the bottom is covered. Use sunflower oil or canola oil, or even better, lard. Do not use oil with a special flavor like olive, peanut, sesame, etc., these don’t go with the flavors of the goulash.
Sauté the onions, bell peppers, and garlic in the hot oil until they get a bit soft.
Add a teaspoon of caraway seeds and two bay leaves into the hot oil and stir it.
Add the diced beef. Stir it until the meat becomes greyish.
Add a tablespoon of tomato paste into the hot oil.
Add 2 tablespoons of mild paprika powder to the pot. (adding more is an option) If you prefer it spicy, add the 1/2-1 tsp of hot paprika powder.
Immediately stir well and fast, and then add quickly as much water so everything is slightly covered.
Add 1-2 chopped tomatoes, salt. and a tiny bit of ground black pepper.
Cover the pot and simmer it for 1-2 hours on low heat. Check the water level often and replace the evaporated water.
When the meat gets tender and soft, you have the pörkölt (the stew). To make the soup, pour as much water into the stew until you get a soupy consistency. Add more salt to your desired taste.
Put the veggies you have cut into the pot:: 2-3 medium-sized diced potatoes, two sliced carrots, and, if you wish, a small sliced parsley root or parsnip.
Cook it until the veggies are soft (al dente). Remove the bay leaves.
Serve with a slice of bread and a dollop of sour cream.