Investment-wise, what can a person do with $1000? $5000? Is playing the stock market insane???

A thousand bucks is not a bad nest egg. I started with $20 when I was 17. I retired at 45. In the course of that time I did not go steadily up the ladder to rertirement. I had ups and downs and went broke more than once. I never declaired bankrupcy but came close to it once. I worked my self into the ground to get back on my feet again after the divorce. I raised 5 kids by my self and still managed to invest.

Here are some suggestions. Invest in a dividend paying stock. Look around and find one that is paying well and regular.
Don't ever take less than a 10% return. If the dividend is not at least that ammount, move on and look for another.
Once invested, the price of the stock does not matter. In fact if it goes down you can celebrate. It means that when you get your dividend payment, you will by buying at a reduced price. The only thing that matters is if the dividend goes down. You want it the same or to go up.
On payday feel free to add to your nest egg. Even if only a little at a time.
Once you have at least 500 shares of stock in a dividend paying company, find out if the stock is optionable. If you can get options on the stock begin writing calls against your stock. Use this money to buy still more stock. When you have 600 shares of stock you can write even more calls. Warren Buffet used this method to build about half of his fortune. This is a conservative approach. As you get more comfortable with options you can begin to buy options if you wish. But I'd wait on that till much much later.

Get some books and do some reading. Learning to trade is the single most profitable thing you can do. If and only If you know what your doing and do it well. That means learning. The only dangerous investor is the ignorant one.

Get some books by wade cook. Don't buy any of his stuff. Just read the books. Also stay away from margin investing as he suggests. There is a reason he makes his money selling wade cook instead of investing. (readers digest outed him)

You can however gain a great understanding from his books so visit your local library. Never by the books unless you have to.

Next get a book called Your money or your life by Joe Dominguez and Vicki Robin. It will help you budget so you can do more investing faster.

There is another book called heads you win tails you win but I can't remember the author.

There are in fact a good many books on the topic. Visit any book store and you will find whole sections on the topic.

You may also find that most of these books are a total snore, (see using technical Analysis by Clifford Pistolese) and you may find your self dozing off after the first 3 sentances. If however you can force your eye lids to stay open, and you begin to absorb some of the information, it will begin to help you. After you score a few wins and you see your nest egg grow, you will find it less and less difficult to do the reading. However you just wont find it all that interesting till AFTER you see the power of what you have learned and put to work. Thats why most people never get into investing. It is just too dull to get started into the stuff.

My first investment was 20 bucks in the highschool candy store. At the end of the school year it was worth $80. I was hooked. Back in those days I was making 2 bucks an hour. Do you have any idea how long it took me to make $80 after the government took all the taxes from a kids check when the kid had no deductions? That was over a weeks pay. WOW a weeks pay in 9 months with $20 seed money. Once you learn what your doing and you start to see your nest egg grow it gets in your blood and you can't quite. I may be retired, but I'm still hot for investing. Its my hobby now. Make investing your hobby, see how far it takes you

If you want to do something more sophisticated and can't get enough money together to do it (like selling covered calls) get some friends together and start an investing club. My sister did that for over a decade. They liquidated the club and every one walked away with 10's of thousands of dollars. As a club they did really well. Every one in the club reported on one or 2 stocks. No one tried to be an expert on everything. So every one was assigned 1 or 2 stocks and thats what they followed and read up on. As a result in a 10 year period of time, they raked in the cash. Every one took turns doing book reports as well. As a group they did lots of reading. So should you. Sorry no romance novels. Just investing books. Go for it.