One problem with the first approach is that literal translations can be awkward. An obvious problem with paraphrasing is that the translator may not accurately convey the intent of the speaker, especially where precision of language is required. So many of the best translations take a middle ground, sometimes known as dynamic equivalence — trying to convey the thoughts and intent of the original, veering from the literal where needed.

Here are some basic tips to keep in mind when translating:

Read avidly in both languages:
Reading the genres you wish to translate will help you become better acquainted with the writer and the nuances of language, culture, thought, and message. This will help you understand what the writer is trying to relay figuratively. Reading will also help you develop your language skills and keep up with any changes in dialects or semantics.

Take a course:
Taking a course in comparative literature, linguistics, languages, or translation will give you the technical skills and a confidence boost. Such academic training will also give you access to literary lectures, mentorships with professors who translate and libraries with extensive collections. If academia doesn't fit into your schedule, you can teach yourself through books or translation blogs and websites.

Research the writer and work you are translating.
Translating means not just looking at the words but also trying to understand the writer's work and what message he/she is trying to convey. In order to do so, find out when and where the work was written; the writer's history; the historical context of the piece; literary references (if any); etc.

Practice, practice, practice:
You can only get better by working hard and regularly, if possible – daily doing an exercise on translation. It gets easier and faster with practice and after a while, you will be amazed at how much work you have accumulated. 

Most importantly, keep in mind that translation is an art not a science. So use your judgment and creative skills as well as your vocabulary to get the “right” words.