My opinion....
1.) Buy or build a solid belt grinder. KMG, no-weld grinder, grinder-in-a-box, etc. You can set it up with step pulleys if it's a NWG or KMG and save money over a true variable speed.
2.) Buy a solid drill press
3.) Send out your high alloy blades for heat treating for the time being until you can save up for an oven.
Of course, if you're looking more at the forging side of it, you'll need to build a forge. I still think a 2x72" grinder and a drill press are the two tools I would hate to live without beyond all others.
--nathan
Dead on
and with regard to forging, I say do 10, or 20, or 100 stock removal before you try to forge.
Variable speed on the grinder is nice and much more expensive to retrofit than install the first time.
Get the small wheel attachment for the grinder..1/2 or 3/4 or 1" wheel.
A drill press is a huge help;
a $ 200 import is not as good as a $1,200 make in USA industrial model, but not $1,000 better for your purposes.
Get what you can, hand drills are crap in comparison.
-and get a full set of drills,
Fractional by 64/ths, Numbers and letters.
You will get to know which ones you use most, but I think 1 of each is a minimum. It's nice knowing you have them all.
Bench vise - 6",
Allow $ for learning materials, books and videos.
If you don't have them, allow lots of $ for small hand tools, hammer, prick punch, a small machinist square, clamps...I just love Kant-twist clamps, their expensive but I love them.
You can make small specialized ones like a knife vise, filing guide, small hydraulic press for pin setting and stamping a logo...
Leave lots of $ for supplies: Belts, files, abrasive paper, steel, handle material...
I would hate to think about the $ I have in those items...
(with more discipline, I likely could have avoided much of this with better planning - ie plan out your first 10 knives, drawings, materials...and just buy those items...but pretty wood is pretty wood.)
Many many makers on here swear by a porta bandsaw, or 4x6" metal cutting bandsaw, but a good hacksaw with good blades will do a lot of cutting until you get one.
Forget a buffer, a nice satin is so much better than a poor mirror polish.