You have those numbers reversed ... a $500 lathe will need $1000 in tooling :nana:
Machine tools are a lot like having children, you'll be spending money on them as long as you're alive. EBay can be your best friend on tooling, and it's possible to pay 10%-20% of new price on lots of items - if you aren't in a hurry.
Here's a short (?) list of items that may not be included with your lathe:
3-jaw and 4-jaw chucks (the lathe will probably come with one or the other)
Live center for the tailstock
Quick change tool post (QCTP) which usually comes with a few tooling blocks
Carbide insert tooling. The good news is that smaller machines use smaller (lower cost) tooling. Curt at LatheInserts.com has a special price of $48 for a nice set:
http://www.practicalmachinist.com/v...by-guys-3-8-indexable-lathe-kits-back-200093/
There are some people who still use HSS tooling, but I can't say anything good about it except that it's dirt cheap. Maybe if you reside in a cave in Afghanistan with OBL, it would be OK :devil: You'll also need a boring bar or two, and the Mesa Tool bars (made in USA) are top quality at bargain prices:
http://www.mesatool.com/index.php?main_page=index&cPath=0
Look also at their internal/external threading tool.
Digital calipers, 6" or preferably 8". The cheap ones eat batteries like there's no tomorrow, and a decent digical costs around $100 (Mitutoyo is a popular brand & eBay always has some listed).
Micrometers, at least a 0-1" and a 1-2". Mitu also makes nice mics, as does Starrett. Look again on eBay.
Drill chuck with tapered shank to fit into tailstock. That will see lots of use. The keyed Jacobs Super Chuck 14N has been a toolroom standard ever since I can remember. EBay.
A set of HSS twist drills, 1/16" to 1/2". Precision Twist makes awfully nice drills, as do many USA manufacturers. EBay.
A set of center drills, used both to put a center hole in a part for the live center & as a starter spot for a twist drill. HSS is fine. EBay.
That's a start :oops:
Another great source for used (and sometimes new) tooling is Plaza Machinery. Joe doesn't have a phone in the shop, but he has a fax machine and computer - email or fax to confirm availability & shipping cost if you see something you like. His prices are often much less than ... eBay:
http://plazamachinery.com/files/metal616.pdf