Chris has offered some great advice here.
For me I always find that it is often better to just do a new painting then to try and fix one. Unless it is a minor change the piece just gets to over worked. Also it is always much easier to make sure drawing and composition are good upfront then to correct it later.
As for older work and it hanging around later when you are capable of better. Well that is up to you but personally I throw the old paintings out.
That is also why I advise against selling work until you are truly ready. If it is a personal painting and still in your collection then you can still destroy it later but if it was commissioned well it is now out there from now until eternity (or until it falls apart) as a example of your work.
Giving it away to relatives can also come back to haunt you. You never know who will pay a visit to you aunt and see that painting you did 10 years ago. So no matter how appalled your family is seeing you destroy a painting don't listen to them if you are not happy with the painting destroy it. It does not matter if your mom likes it or if it was a representation of your child and has memories if it is a bad painting get rid of it. (just my opinion)
When are you ready? I can't answer that for you since only you know what your goal is for your work. But if you have a goal then you will know. You are ready when you can honestly look at your work and say it is at least very close to that goal you set for yourself. Until then keep only your best paintings and don't sell any and as you do better get rid of those that are farthest from your goal. Once you have 20 or so good paintings then you have a start, pick the best 10 for a portfolio and show those. Then try and make every painting you do equal to or better then those best 10 and you are ready to start selling your work.
Not every painting you do must be a permanent record of your work Many study and sketch paintings I do, I wipe out before the paint dries. I may do another on that subject or not but you do not have to save everything in fact I advise against it. Paint a lot and don't worry that it must be great for you have to paint a lot to get good but you do not need to keep them all. I may do 2 or more throw-aways, I call them, a week these are paintings that are just paintings to keep fresh to work out ideas or to work on a technique. I don't care if they are good or not when I start if they turn out OK I might keep them but most of the time they are thrown or wiped out. If I am working on a complex painting I might do a few of these throw-aways as studies or if I get to a area of a painting that just is not working I might scrape off that section and pickup another canvas and try different things on that then go back to the final painting and with the problem solved on the throw-away I can then zip through that section with confidence. And I do not have to deal with muddy colors or working over mistakes I might have made experimenting on the final painting.
I have wasted time working and reworking paintings that I should have just thrown out and started over. Some might say you ruin a good painting overworking it. But I feel really you are just making a bad painting worse for if it was good by your standard then you would have stopped working on it and declared it finished. So what if it was good in someone else's opinion if you are not happy with it then keep working or if needed wipe it out and start over. It is your painting no one else's. Sometimes what is needed is more work on a area other times a fresh start is better.
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