To create a sub-folder you first need to be inside a main folder of your choice. For example: Create a new folder, as shown in the How To Create A Folder section, inside the DOCUMENTS (main) folder. Then rename that folder from New folder to Cooking. Cooking will then be your main folder.
Remember: Any folder can be a main folder (like DOCUMENTS), but unless it is the root folder (like the OS (C:) hard drive folder) it will always be a sub-folder. In other words: DOCUMENTS is the main folder for all your Documents and therefore a folder in its own right, but it is also a sub-folder of the USER NAME (i.e. John) sub-folder. In turn, the USER NAME folder, which is also a folder in its own right, is a sub-folder of the root folder OS (C:) - The main (root) hard drive folder.
The same applies to Cooking. It will be your main folder, but at the same time it is a sub-folder of the DOCUMENTS sub-folder. Microsoft tends to use the generic name Folder for everything, which in my opinion is wrong because sometimes it is best to clarify what type of folder is being created/used. This is why there is no NEW menu menu-item called Sub-Folder for creating a new sub-folder. You have to use NEW and then FOLDER.
With the main Cooking folder created (inside DOCUMENTS) double click on it (Fig 1.0 below) to go inside it and then look at the window's Address Bar (Fig 1.1). It should have Cooking at the end of it. Any time you need to know which folder/sub-folder you are inside just look at the end of the Address Bar. In this example I have JOHN > DOCUMENTS > COOKING which means Cooking is inside DOCUMENTS and DOCUMENTS is inside JOHN. The path name for this is: C:\Users\John\Documents\Cooking - Do not worry about understanding this though as Path Names are explained in a later section.
Fig 1.0 - Double Click on the Cooking folder
Fig 1.1 - Inside the Cooking folder, after double clicking on it.
Now create three new folders, as shown in the How To Create A Folder section, inside this Cooking folder and then rename them Cook Books, Ingredients and Recipes respectively. Remember: These will be known as sub-folders inside the main Cooking folder. Here is what your three sub-folders should look like.
Fig 1.2 - Three sub-folders have been created inside the main Cooking folder.
If you wanted to create sub-folders for other sub-folders you would simply do the above again. So to create a sub-folder inside the Cook Books sub-folder, called Cakes for example, you would double-click on the Cook Books sub-folder to get inside it and then create a new folder called Cakes. Cakes would then be known as a sub-folder inside the Cook Books sub-folder.
To get out of a sub-folder you can either click on the BACKwards button (Fig 1.3 below), locate in the top-left corner of the folder (window) or click on a previous folder's name from within the Address Bar (Fig 1.4).
Fig 1.3 - Click on the BACKwards button to get out of the Cooking sub-folder and back into the main DOCUMENTS folder
Fig 1.4 - Click on a previous folder's name (i.e. DOCUMENTS) to get out of the current sub-folder (i.e. out of the Cooking sub-folder)