First off, I would say it is normal to feel like you don’t know many words even after studying a language for years. It is possible to be discouraged even after a long time. I’m not bringing this up to scare you or make you feel bad. It is something that just needs to be understood and accepted as part of any language learning journey. So, no matter what, just focus on the positive and what you are able to understand!
That said, in my opinion I think people should start reading as soon as they learn the kana. Even for people a bit shaky on the kana, read OUT LOUD to yourself. Reading aloud and not just in your head is important. For this particular exercise it does not matter at all if you are able to understand anything.
I also think it is important to read things that you can understand, things like graded readers. Start reading these at a level that challenges you, but that you can still understand most of. If you are looking for more resources this thread likely has you covered: