Spend your whole first month (at least!) reading about the domain name market... Understand why prices are the way they are. Look up current trends and attempt to extrapolate. Definitely
do not spend all your money starting out on a few good names. You'll probably end up getting ripped off and the whole domain experience will become sour for you. Rather, do as Nametrader said... Keep thinking of ideas, researching new trends, areas of interest, and checking expired domain lists. Only reg the very best ones you're able to find. Try and sell these names. Are you able to sell them? Do you now have a reasonable grasp on the potential value a name has under usual circumstances? Take that knowledge you've acquired over your first month or two... Now, consider investing in a quality .com. Don't get suckered into spending x,xxx on a different tld or worse -- a cctld. You're new -- you need things simple... And it doesn't get simpler than .com :bingo:
When considering investing in a good .com, ask yourself what's important to you. Do you need the revenue that could be generated from a parked name? Are you interested in finding a name which has a high ppc value and could easily be developed into a profitable site?
Ask yourself why you want/need this particular name. Think long and hard about it. Think of the best ways to monetize this name. Stay away from names with traffic stats... Get a good .com that "sells" itself on it's own merit. Traffic stats can be easily forged and we really don't want to worry about all that this early in the game.
When it comes to making your first large investment, after having decided what you plan on doing with it (parking, developing, reselling, etc), try and figure out a ballpark figure of how much money you'll be able to generate off this name. It doesn't have to be exact -- it won't be exact. But having an idea of around how much you can make, is a good way to start planning for the future. My recommendation -- a LLL.com, a couple premium CVCV.com
or a good dictionary word .com. Don't get fooled into paying exhorbitant prices for a name just because it's listed in a dictionary... Do as some of the other people here have recommend and shop around. Look at names listed on Sedo, Afternic, and other domain name exchanges. When looking at these exchanges, take the prices with a grain of salt. It's easy for anyone to ask $10k usd for a shoddy name. It's not what you ask for it... It's what you can
get for it. Check resources such as NameBio and DnJournal. These provide a concrete sales history. Unlike Sedo, these are not asking prices -- these are what names have sold for in the past. You can use tools such as Estibot and Premium Domain (Domain Score) to compare a name to another one or attempt to guage the value of a name in question. Don't pay prices based on what these free services report. Rather, look at the value reported and attempt to understand why the automated program reported the value that it did. High prices reported by automated programs are no guarantee that your name is great -- but be extremely weary if the name you're paying xxxx for is reported as being worth reg fee (you get the idea) by Estibot, or non premium by Premium Domain. If it isn't premium or scores low on Estibot's valuation, ask yourself why that is. Is it something new that hasn't hit mainstreasm yet (think of wikis or blogs a few years back)? A low valuation does not necessarily imply that you're being ripped off, rather that you should proceed with caution.
Definitely toss all your profits back into additional names. If you have deep pockets you can now begin looking for a second name (still sticking with .com at this point). If not, get your name monetized (however you choose to do it) asap so you can start saving towards your next name.
Use this downtime (if you're like most people) to further expand your knowledge of domaining. Read up on the latest trends (and always continue doing such...). These change fast, so don't think that what was hot 2 months ago is necessarily the real deal today.
Since you probably will have a few months before your name generates enough money to consider investing in another .com, start learning about the other markets available to you. Since your money supply is limited, you won't be able to buy premium .coms week after week (duh!). You're likely still not ready to experiment with speculative extensions like .tv, .mobi, most cctlds, LLLL.com (not CVCV/VCVC), so don't go there. The biggest way a newbie can be burned is by getting into speculative extensions when they don't have the requisite knowledge and appreciation of domaining to truly grasp the liquidity of this market. Since your money supply is limited, you need names that are either liquid, generate a steady stream of income, or optimally, both. This means you should focus on .coms and premium .nets
only, for the time being. As you gain more experience and a thorough understanding of the value of .coms and .nets (and hopefully a fatter bank account!), you can slowly move into markets that aren't as liquid. Start with .info... Good .infos aren't that hard to sell. Once you get the hang of waiting a bit longer for sales -- and having enough money that you can afford to wait on sales, you can start investing in speculative extensions. Rule #1 of investing...
Never invest more than you can afford to lose. We can all agree that a LLL.com, premium 1 word generic .com, etc are solid investments, likely to go nowhere but through the stratosphere in years to come. The same cannot necessarily be said about speculative extensions.
Nobody really knows whether .mobi will become the mobile standard, whether .tv will become synonymous with online video, whether LLLL.coms will appreciate as CVCV.coms have, whether CVCV.net will follow in Big Brother's footsteps, etc. These investments have an inherent risk that investing in the former does not have. Do not consider investing in these extensions until you have a thorough knowledge of domaining, an understanding of liquidity, and an understanding of the risks involved with making large investments in speculative extensions. I would
never put more than 20% of my investment in a speculative extension -- it's just too much money to potentially lose -- not to mention the fact that speculative extensions can be a plague for anyone who doesn't understand the importance of spreading registrations throughout the year. Zero liquidity (or near zero) means that you end up selling your names at a loss (or under what you presume to be their market value), because you need the money. Don't fall into this trap. Don't invest more than you can afford -- especially if investing in speculative extensions.
That sure was alot to digest! Okay... I promise I'm almost done
Here's a few more tips to consider when entering domaining...
1.
Length -- how long is your domain name? One word domains are usually easier to sell and sell for higher amounts than 2 word domains from the same sector.
2.
Pronouncability -- Is it easy to pronounce, or is pronouncing the name really stretching it? Prounouncability leads right into...
3.
Memorability -- how easy is it to remember this name? A memorable name is generally a non-hyphenated name, composed of 1 or 2 words which go well together. Stay away from numbers -- especially the use of numbers as letters (such as one and 1) to form words. A memorable name probably has...
4.
Brandability -- Could a company center a product or website
around this name?
5.
Grammatical Tense -- Use a tool, such as Wordtracker to ensure you use the right one. What seems like the most used tense to you may be different from how the rest of the world sees it. Also use Wordtracker to identify whether the term is more popular in it's plural or singular form.
6.
USPTO.GOV is your friend -- remember that! Don't be a n00b and get into TM or typosquatting. You can make plenty of money in domaining without stooping to that level.
7.
TLD/ccTLD -- What extension is it? I use a 1/10/30 rule for .com, .net, .info -- meaning that I first attempt to determine the approximate value of a .com, then, I associate approximately 10% of that value as a maximum value of the .net and then assign one third of the .net value (or 1/30 of the .com value) to the .info. I use these as maximum prices I would pay. So if I feel a particular .com is worth 100k, I wouldn't value the .info at more than around 3k in example. Seeing as I want to make a profit, I wouldn't consider going higher than 2.5k under such a scenario. As for offering... Most domainers are pretty reasonable to other domainers (i.e. dealing with another NPer). If I'm dealing with a individual who I'm not sure if they're a domainer or not, I'll typically start off by offering them 10% of the maximum I'd be willing to pay for their name (in the above case, that would be $250). If they know me and I know them, I'll usually start off around 40-50% of the maximum I'd be willing to pay. No matter what you offer on your first offer, people will generally figure that your first offer usually isn't your best offer (and usually it isn't), so keep this in mind when beginning negotiations -- leave room to negotiate.
8.
Target Market -- Who exactly is going to buy your name? If it's a generic .com or LLL.com, okay, you need not worry. But what if it's not? Obviously the larger the target market, the better. A name like health.com is worth more than a name like healthstore.com for several reasons -- but 1 of they key reasons is because health.com has a bigger target market (as well as greatly increased traffic, but that's another matter). How many potential endusers would this name have?
9.
Traffic -- The big T! No traffic, no money. Easy as that. If you're name receives no traffic whatsoever, the only way you'll be able to generate income is by selling it. This makes it a less attractive option than buying a name which receives plenty of free traffic even when it hasn't been developed.
10.
Plan for the future -- Hedge your investments and hedge them well my friend! You can't predict the future (at least
you can't :D ), so prepare for it in advance. Use strategies such as diversification to minimize risk. If you plan on investing some of your money in speculative extensions, put at least twice that amount in solid .coms, so as to minimize the damage done should your investment in speculative extensions not pan out. Don't forget to spread out those renewal dates -- that can be a killer!
11.
Keep coming back to Namepros. There's always new stuff to learn! 
