2. Purchase the required collateral from the exchange.
3. Get a VPS (this is better in my experience than setting up a personal server)
4. Transfer the required coins from the exchange to your wallet.
5. Get masternode private key and output and load the info into the VPS server
6. Fire up your masternode.
Most of the cheap masternodes are dash clones and follow the same setup as Dash - Hot VPS/Cold wallet.
Your coins are stored in your wallet, Not in the VPS server that's why item 5 is required.
https://www.dash.org/forum/threads/taos-masternode-setup-guide-for-dummies-updated-for-12-1.2680/
great way to put this! easy for anyone to start
Most people miss the points of this. The masternode community is growing, with very little attention from mass population of users