What is the best way to configure password in Cisco IOS?

I am running IOS 15.2(4) on a 1921 Router
What is the best way to configure the password for the router?  I have already tried once and managed to lock myself out of another switch.  I would like to use the most secure method which encrypts the password.
Current Config:
username admin privilege 15 password 0 cisco123

Cisco IOS will not let me use a type 5 password.  This is the error message I receive: 
ERROR: The secret you entered is not a valid encrypted secret.
To enter an UNENCRYPTED secret, do not specify type 5 encryption.
When you properly enter an UNENCRYPTED secret, it will be encrypted.
I tried generating an MD5 hash and inputting that in and that did not work either.  When I do not specify type 5 it will default to using an encrypted type 4 password.
Also, what is the difference between these two enable secret commands?
enable secret 5 password
username admin privilege 15 secret 5 password 

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