Let's go back to the original.
Spend the money first on instruction.
You will not use your display sword in practice. You will use a practice sword. So spend the second money on practice swords.
There are swords of different designs (for reasons) and lengths. After you have undertaken a year or so of training, your objective may change and you may want a somewhat functional long knife or sword in contrast to a display item. So, you might be better off in waiting.
I have to vent a little here... I hope you don't take it personally, because truthfully, there's nothing particularly bad about your advice in an ideal world. It never ceases to amaze me how people just don't bother reading the posts in the thread. You can't just read the title and come up with a relevant and informative response.
That being said...
You do realize that he already said he was already getting instruction, right? Frankly, practice blades are cheap. Many instructors use wooden practice blades on a fairly regular basis. And if he never wanted to do any cutting with the blade, why not just get a wall-hanger? The OP is clearly looking for something that's reasonably aesthetically pleasing (and, being as how it's his first, I'd wager that he'd be pretty happy with a Hanwei or DF in that price range), but still capable of performing cuts.
That being said, you did provide some excellent points, namely that the katana needs to be fit to the person, if they're a serious practitioner. Length and balance are all deeply original. However, to get a truly functional and beautiful blade that's perfect for you will almost certainly take a LOT of cash. Starting off with a ~500 dollar blade isn't an awful idea. And lets be honest here. Most people's first katana costs 100 dollars or fewer, and there's a huge difference between one of those and what the OP is thinking about getting. Not to mention, you only really NEED a custom fit katana if you have very specific performance needs, none of which were listed by the OP.
Let's get real. Only a tiny percentage of even the Blade Forums population is really into swords at all. There are some collectors, who generally have very discriminating tastes, and know exactly what they want. There are the very few serious practitioners (like STeven) who, also, have a good idea of what they want and need, and again, don't need patronizing advice. And then there's everyone else, who really just want a sword for the "cool" factor. They understand perfectly well that they have no need for a sword, and that they'll likely only cut water bottles and pool noodles with it, and the rest of the time it hangs on the wall. Since they have no real need for a sword, they just want something that's capable, reasonably good looking (most people won't know the difference between a 500 dollar katana and a "real" katana," and it would mean nothing to them to see a real one), that won't break, and also won't break the bank, because it's realistically going to hang on the wall most of the time.
Because they understand exactly what they want and why, they're not looking for suggestions that they go get instruction. Most people who buy swords don't really care enough to get instruction, because, realistically, it's a worthless skill in the modern world, and it adds nothing to what they want out of the sword, while it DOES cost a lot in time and money that they probably don't have (otherwise they wouldn't be on a budget).
I'd venture most aren't looking for Bussekin either. An OP to which a Busse or Swamp Rat would be an appropriate response, would almost have to include the word "tactical." It would probably also include the notion "hard use," "tough," or "chopping down trees," and would NOT include the word "budget."
For the serious practitioner, Busse's offerings aren't really worthy suggestions for someone who is looking for a sword. Maybe a sword-like machete object, but not a sword. Sure, they're tough, and SOME find them attractive (although I can't fathom why), and very well made, tough, etc. But they're not really swords, and I have yet to see one with decent balance and handling. They're also well beyond the budgets of most. Does that mean they should never be suggested? Of course not. But there is a time and a place for recommending them, which is pretty specialized.
Personally, I'd get one of Hanwei's offerings. As STeven mentioned, the Tiger Elite is a great offering, although outside the OP's price range. There are plenty of other offerings that are decent that, while not perfect by many of our standards, would be a perfectly respectable first sword.
