2) I find an exchange I like and wire them 1,000USD and let's say I get 2 bitcoins in return.
3) From my reading, I get a private key that I write down and stick in my favorite hiding place.
You missed some steps in between there. You do not get a private key from the exchange.
2.a) I find an exchange I like and wire them 1,000USD and let's say I get 2 bitcoins in return.
2.b) Download and run your own wallet.
2.c) Transfer the 2 bitcoins from exchange to your wallet address.
3) export private key from your wallet and stick it in my favorite hiding place.
(you can also stick it into
your favorite hiding place, but I would prefer mine
)