That is small for a die grinder with a tungsten bit, even the smallest ones are still a sort of short cucumber proportions, Dremel type tool ( lidl or aldi will do if they are ins stock, or any version, the branded Dremels are dear for what they are, and not much power ).Power carving with a kutzall type burr ( either "flame shape" or round ball or round ended cylinder type is going to be easier than hand carving.Total tool cost around 40 to 50 squid, UK screw fix may do a Dremel type tool( expect around 20 to 25 ) , kutzall burrs are probably an amazon buy, unless you have a good model making supply shop near you. wear leather gloves.Not welders gloves, too thick but something to protect your hands, not textile as the burrs will wrap into them and rip your fingers to the bone before you notice that they have bitten.
Again practice for a few hours or an afternoon on some scrap, wear eye protection, if later you work dry wood this way , wear a good well fitting dust mask, power carving makes loads of dust in dry wood or stone.
If you can get the power carving head with a flexidrive ( lidl do a copy of the Scheppach ..actually made for them by Scheppach ) for about 25.00, comes as a mini two stone type bench grinder with power take off on one side via flexi drive with a collet type chuck takes up to 6mm shaft bits ).One of the stones is a grinder ( fine ) the other is a polisher.
neat little unit, I have 3 of them as ready to hand, ( one Scheppach, two Lidls) one I can reach to from here in the living room.
When you've carved your letters..carefully fill them in with black paint.
