Surely if you purchase a domain (domain1.com) and redirect it to your existing domain (domain2.com) you expect to loose all ranking for domain1.com. If 301's are used then the objective is simply to pass on authority, not dominate the search results with 2 domains. If you want to keep domain2.com in the index then you would take Rebecca's option 2 or 3.
Many top-level domains, or TLDs, out there have the potential of being sold at top dollar rates. Gone are the days when domain names with ‘.COM’, ‘.ORG’ and ‘.NET’ were known as top-level domains. Newer domain names with ‘.US’ and ‘.IO’ are also worth their weight in gold. All you have to do is conduct thorough research in order to find all the good domain names you can park.
Finally, we’ll look at a bit of a different animal in the expired domains world and that’s pending delete. To do that just click on the pending delete button which is right next to the Go Daddy Auction’s button. What this does is it shows you domains that aren’t quite deleted yet. So, they’re right before they get into this deleted category in expired domains. They’re going to be deleted, so they haven’t been renewed by whoever registered them, so they’re going to get dropped.
That said, my recommended budget for beginners would be $500+. Using this budget you could buy a bunch of high-potential $10 domain names, expired/dropped domain names or a mix of both. It’s very important to invest only what you can afford to lose and treat this as a side hustle till you get the momentum going. As you gain experience, industry expertise and some sales under your belt, you can then consider slowly growing your business into a full-time gig.