Building a Personal Knowledge Base on Obsidian + AI: My Approach

This is for people who have never opened a single line of “code” in their life and have no intention to start. If we can use Word and Google Drive — that’s already enough.

Why this hurts

Let me say it upfront — this is not about “yet another note-taking app.” It’s about specific pains that keep repeating:

• We’re looking for one important thing and can’t remember where it is. In email? In Google Docs? In Notion? In a Telegram chat with ourselves?
• We have three versions of the same file — _final, _final2, _final_v3_FINAL. And we have no idea which one is the fresh one.
• We want to let AI read our documents to help us — but we’re scared, because there’s client data, NDAs, contracts, personal stuff in there.
• We once made nice notes in Notion — and now, to “move out” of it, we need to hire someone and pay.

All of this gets solved by one approach: our notes live on our laptop as plain text files, and AI reads them locally, sending nothing into model training.

How it works — one folder and three apps

Imagine Word documents sitting in a simple folder on our laptop. One folder — everything lives there. On top of this folder we have three apps: one for viewing notes nicely, the second for working with the same files through an AI chat, the third is the AI itself.

App	What it does	Price
Obsidian	A pleasant app for notes. Looks like Word, but stores files as plain text — they’ll open anywhere, even ten years from now.	Free
VS Code	A regular app from Microsoft. Don’t be scared of the word “Code” — it just knows how to “understand folders” and plays well with AI. No programming required.	Free
Claude Code	An extension for VS Code (like an app inside an app). This is the AI chat — like ChatGPT, but it sees files in our folder and can work with them.	Included in our regular Claude subscription — no extra charges

The key thing to remember: all three work with the same folder. We create a note in Obsidian — the AI in VS Code sees it instantly. We ask the AI to create a new one — it appears in Obsidian. One vault — three views into it.

Install order — step by step

One thing at a time. It’ll take about 30 minutes.

Step 1 — Obsidian and our folder

1. Let’s open obsidian.md in the browser, click the big Download button, run the downloaded file.
2. On first launch, Obsidian will ask where to store notes. We create a folder, for example D:/Obsidian/MyVault (on Mac — under Documents/MyVault). We name it whatever we want — this is our “base.”
3. Done. This folder is now our storage. Let’s remember its path, we’ll need it in Step 4.

Step 2 — VS Code

1. Download from code.visualstudio.com, run the installer. All defaults — OK.
2. Let’s launch VS Code. The first time — an empty gray screen. That’s normal, we’ll fill it now.

Step 3 — Claude extension in VS Code

1. In VS Code, we find the Extensions icon on the left (the little squares). Or press Ctrl+Shift+X.
2. We type “Claude Code” into the search. Click Install next to the official extension from Anthropic.
3. After installation, the extension will ask us to log in. We click the login button — the browser will open. We sign in with our claude.ai account. If we already have a Claude subscription — Claude Code is included automatically, we don’t pay anything extra.

Step 4 — Open our folder in VS Code

1. In VS Code: File → Open Folder (or Cmd+O on Mac).
2. We pick the same folder we created for Obsidian (from Step 1, e.g. D:/Obsidian/MyVault).
3. On the right, we open the Claude pane (the extension icon in the upper right corner, or Ctrl+Esc). This is our AI chat that sees our folder.

That’s it. Now we have everything we need. Time to start filling it.

How to organize — the PARA system

PARA is 5 base folders inside our vault. Imagine a big wardrobe with 5 drawers:

• 00_Inbox — drop any new note here when we have no time to think where it belongs. We sort it later, once a week.
• 10_Projects — anything with a deadline and a concrete outcome. Launching a site, writing a book, closing a client deal.
• 20_Areas — areas of life that go on forever. Health, finances, family, career.
• 30_Resources — useful materials, book notes, articles, templates.
• 40_Archive — anything finished or no longer relevant. Don’t delete — move here.

The method is called PARA, invented by Tiago Forte. Battle-tested by millions.

Two ways to set it up:

Option A — by hand (5 minutes). Right in Obsidian, left panel → right click → New folder. Create one by one: 00_Inbox, 10_Projects, 20_Areas, 30_Resources, 40_Archive. Plus a separate 99_Meta (for templates and meta stuff).

Option B — ask the AI (10 seconds). If we’ve already done Steps 1-4 — our folder is open in VS Code with Claude. Just write to it in the chat:

Create a PARA structure in the current folder:
- 5 base folders: 00_Inbox, 10_Projects, 20_Areas, 30_Resources, 40_Archive
- a 99_Meta folder with a Templates subfolder
- an empty 00_Dashboard.md file in the root
After that — show me the tree of what you created.

The AI will build the structure in a couple of seconds and show us the result. If something’s off — we just tell it to fix it, and it will.

The most important setting — CLAUDE.md

One last detail, without which the AI will behave like “just a chat that knows nothing about us.” In the root of our folder, we create a file called CLAUDE.md. The AI reads it every single time we start a session — it’s like a “passport” of our system.

What to write — a starter scaffold (replace the bracketed placeholders with our data):

# My vault

## Who I am
[Name or handle], [role — e.g. founder, lawyer, marketer].
Running [number] projects + personal.

## Language and style
- English in all responses
- Short, to the point, no fluff
- Changes in 2+ files → show the plan first, then execute

## Folder structure (PARA)
- 00_Inbox — new notes go here
- 10_Projects — active projects
- 20_Areas — ongoing areas
- 30_Resources — reference materials
- 40_Archive — finished
- 99_Meta — templates

## Rules
- Don't touch the .obsidian/ folder
- No deletions without confirmation
- Use [[wikilinks]] between notes

Replace the brackets with our real data — literally a few lines. This is our minimum. The AI will start treating us as specific people, not as “anonymous chat users.”

There’s also memory — a system that lets the AI automatically remember important things between sessions (our preferences, project history, decisions). This is another powerful tool and deserves its own post — (in the works, will appear here).

What’s next

A base vault is the foundation. The real power kicks in when we build a rhythm and understand how the AI works with memory. I’ll cover each next block separately, in plain words:

• CLAUDE.md and memory in depth — how the AI remembers us between conversations and how that differs from ChatGPT.
• How to keep a copy online (privately) — so we don’t lose our notes if our laptop dies. No mention of the term “git,” I promise.
• Security: what we DON’T put in the vault — passwords, cards, other people’s NDAs. A concrete list and alternatives.
• Sync between laptop and phone — three options, pros and cons of each.
• Which plugins actually help — and which are a waste of time.
• Daily and weekly rhythm — 10 minutes a day, 30 a week. Without this, even the best structure is dead.

If we don’t want to miss it — follow me on LinkedIn, I announce each piece there.

Common mistakes at the start

1. We want a “perfect” structure with 50 folders right away. Don’t. We start with PARA and Inbox. The rest will grow in a month.
2. We create files in the root of the vault. Don’t — only inside folders. In the root — only the dashboard and CLAUDE.md.
3. We delete an old note because “it’s junk.” Don’t delete — move it to Archive. We’ll need it in a year.
4. We don’t start because “I haven’t figured it out yet.” We’ll figure it out as we go. The first 10 notes are an experiment anyway.