you can do both. at your level i wouldnt be spending mroe than like 50k a player. but yea you should focus on building your stadium first.
theres really 2 way to approach this game.
the first way is to scrap all your players and start fresh. teams like TFS and the bridesmaids teams have done this and they look very promising for the future. bid downside of this is that you will be stuff in the lower divisions for several seasons.
the second way is to add pieces as you go along. Use your current players even if they have low consistency or talent (you compensate this by having high skills in the other areas) while getting players slowly. you will be successful right off the start. However, when its time to replace the players, the other teams that took the first path will have the players already replaced so you MAY fall behind. but by that time you will have a rich team that can train quickly.

i personally like the second path