please don't take offense by this, but you will NOT start off making awesome knives. they will be ok at best. (at least that's how most of us start) however if you end up having the craving to make, and willingness to progress and make each one better than the last, then you one day might. its a lot of work, as erik said, itll take a lot of money, or a lot more time. that's the trade off when buying tools. I too recommend the wayne goodard books. great source to start. oh and you WILL be doing stock removal. all the hammer is doing is pushing the metal around so you end up with less stock to grind away. you still need to grind/file to remove tool marks, fine tune the shape, and so on.
now.... if you DONT KNOW yet if you want to make knives, then youll be better off not buying any tools yet. start with one of the wayne goodard books. you can find them on ebay for around $8, or go to local book store and flip through the pages before you buy it.
let us know where in the world you are, and finding a maker near you wholl let you into their shop to introduce you to the process.
FORGE... (gas will be easier) here is a good dvd to get you started making your own forge
http://www.rayrogers.com/books.htm
ANVIL...... deceptively simple looking. TRY MAKING ONE THAT WEIGHS +100lbs. then think about how much they cost. as for using a found object.... you want something forged, not cast.
GRINDER... you can get by with a 1x30, and a 4x36, but youll eventually need to upgrade.
youll want to get good files too. youll use them so much more than you think.
VISE.... got to have something solid to hold what youre working on securely.
as for increasing your budget..... get you a few 100 railroad spikes and hammer then out into knife shaped objects. (people love those things) do the same with some horse shoes, and old wrenches... sell those and use that $$$$ to invest in better steels, and tools.