- Betteredge decides that he should record something about the family he works for.
- His employer, Lady Julia Verinder, has several siblings. Her brother, John Herncastle, is the one who stole the diamond in India. He's kind of the black sheep of the family – no one really likes him. Lady Julia also has two sisters. Her sister Adelaide married a guy named Mr. Blake, and their son is named Franklin. Her sister Caroline married someone named Mr. Ablewhite, and their son is named Godfrey. Julia was the youngest and prettiest, and she married a rich man named Lord Verinder. Lord Verinder died a few years before the start of the novel. Their daughter is named Rachel.
- Betteredge describes his own position in the family – he's been a trusted servant for many years.
- He was married, but his wife died many years ago.
- He doesn't seem to have been all that fond of his wife.
- He loves his daughter, Penelope, though.
- Penelope is about the same age as Rachel, Lady Verinder's daughter, and she is Rachel's maid.
- Penelope has been peeping over her dad's shoulder as he was writing all this, and she points out that it's all very well written, but that it's about him, instead of about the diamond.
- Whoops! says Betteredge. Time for a new chapter.