Add custom functionality. What is the best way?

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I am a developer but a new to WordPress. I want to do some custom development. As far as I know I have three options to so so:

1. Functions.php
2. Code snippet plugin
3. Create my own plugin

Am I correct that these are the available options?
My intention would be to create one, custom, plugin in order to customize my environment. In this way I am flexible and independent. Would you agree?

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