It doesn’t take tens of thousands or even thousands of pounds to start buying shares. In fact, I see some advantages in starting an investment activity earlier on a more modest basis, without having to wait years or decades to save money.

That would give me a longer time frame to reap potential investment gains, for example. Hopefully it could also mean that all the rookie mistakes I made would be cheaper.

If I had never invested in the stock market before and wanted to use £400 left over to start buying shares this week, this is how I would go about it.

Starting small and aiming for growth

With £400, it might seem tempting to bet on some small businesses that, if things go right, could become stratospheric.

I would take a different approach, for a few reasons. I am an investor not a speculator and with only £400 to invest I would really like to avoid unnecessary risk. Rather than investing in companies that Power become massive, I would prefer to invest in ones that are already massive and have proven business models.

In doing so, I would focus on targeting companies I believed had good long-term prospects and an attractive price, alongside a proven business model. However, the future is unpredictable, so I would aim to reduce my risk by spreading the £400 across several different stocks.

Find stocks to buy for the first time

With thousands of stocks available to buy, where should I start as a beginner? As a billionaire investor Warren Buffett emphasizing that I would stick to my circle of expertise, choosing companies that I felt I understood and so could analyze.

I would look for a company that I expected to do well in the future and had a decent one balance sheet. Too much debt can kill even a strong company.

As an example is a stock that I think investors might consider buying Dunelm (LSE: DNLM). The business operates in an area that is likely to see strong demand in the long term, as people continue to want to decorate or renovate their homes.

Thanks to unique product lines and a large customer base, Dunelm has what I see as a solid competitive advantage. It has been consistently profitable and I also like the dividend record. It often pays special dividends when it has free cash, although no company’s dividend is ever guaranteed to last.

Over the past five years, Dunelm shares have risen 47%. It means its price in relation to profit (a common valuation metric) is 16, which I don’t see as a bargain but think is fair for a business of Dunelm’s quality.

Beginning the journey to build wealth

Like all stocks, Dunelm has risks. A weak real estate market can, for example, damage sales and earnings. Managing risks both apparent and unseen is a key skill for any investor and one I would start honing from day one.

I would start buying stocks by setting one up stock trading account or Stocks and shares ISA today and then research which companies appealed to me as investments at their current price.