Originally Answered: Is it better to mix baby formula with milk or water? Or should I opt for liquid formula?
I hope that breastfeeding works out for you. However, to answer your original question...
For the first 3 months the risks for a fairly rare bacteria is higher. It's a rare bacteria, but if a newborn gets it, they can get very sick and die or be hospitalized. So there are recommendations that you should either use ready-to-feed, concentrated mixed with sterile water, or powder added to HOT water so as to kill the bacteria. It is impossible for powder formula to be sterile, but concentrated and ready-to-feed is normal. However if you make it with hot water then it kills the probiotics and degrades some of the nutrients/vitamins. It's sort of a problem as no one is quite sure which is more important. These prebiotics have been shown to help a formula fed babies gut to be more like a breastfed baby's, and to increase their immunity to diseases.
When mixing formula you follow the instructions on the can. It should never be mixed with cow's milk since cow's milk has proteins that are too complex for a baby to digest and can cause anemia. And while cereal can be added for some disorders (some babies have problems like GERD that make doctors recommend adding cereal to the formula, follow your doctor's advice), for most people they shouldn't feed cereals except by spoon starting between 4-6 months.
Take 'risks of formula' with a grain of salt. It's politically correct right now to shame and make anyone who feeds any formula feel bad about that choice, and saying "there's risks to all formula" or overplaying risks is one of the ways people do that. Some believe in a pseudoscience called 'open gut theory' that if a baby is fed anything but breastmilk then they don't have a 'virgin gut' and that this can lead to all sorts of problems with allergies and weight, but it's been disproven since babies who were exclusively breastfed to 6 months actually had an increase of allergy risks and weight gain has been shown to be more connected to bottles and bottle feeding habits than what's in the bottle.
A recent study showed that the use of formula may help mothers continue to breastfeed if they're having difficulty, but you'd want to use something like a syringe and use a specific plan and a limited amount given after each breastfeeding session, something you can't figure out and use if you plug your ears and close your eyes and pretend that formula doesn't exist! See second link about it.
You're not an idiot. My niece exclusively breastfeeds and has breastfed all 4 of her children without having her milk fail, but she also had formula and bottles for those times when she might not get home in time, or something else interfered. She kept her eyes on the prize and she didn't use the formula unless it was an actual emergency and it didn't hurt her breastfeeding. It's like people who say that if you are dieting then you can't have chocolate in the house. My opinion is if you're that weak in your self discipline then you have bigger problems.
Breastmilk is the most complete and best food for newborns and babies. However formula is not poison and shouldn't be something you pretend doesn't exist and avoid like it's going to hurt your baby! With every 'risk' someone gives you, do research and read the counter, usually the first link is about the only jumping off place you can find since google is weighted against both sides since it's usually believed that if you don't think formula is going to hurt a baby you're more likely to use it. Still she connects to research you can jump and read and figure it out.
Congrats on your baby, and I hope everything goes well. I do hope you have no problems breastfeeding, but if you need to mix formula then I hope this answered questions. And if you make more than enough, see about donating some of it to a milk bank to help out those who can't. :)