This is a 'how to get rich' guide. Bear in mind I play with BigMap mod which has more cities and thus more money, but the principle works the same. First move is to set your settings so that taxation and building construction is automatic, allow heavy spending but YOU MUST REGULATE UNIT BUILDING. It will automatically retrain units for you despite this setting, which is good.

1. Cut Down On Military Spending. This is probably the biggest drain on your economy. A huge city has 6 free upkeep slots for militia, so allow 6 militia units per town. Whether they're crappy peasants or Heavy Bill Militia, they're still free upkeep so I'd recommend getting the best possible militia units, you only have to pay for them once. A force this size will be able to valiantly defend against any besieging force, and if you see an enemy army approaching you can always bolster your garrison temporarily. The trick is to have a free militia army defending your towns, and for the big battles you have a professional army, which I'll explain later.

2. Cities Make More Money Than Castles. In an ideal world you would have 100% cities. But with just 6 militia to each town that would make your military poor. You should have no more than 3 castles serving any one front at a time. For example, I had a front through Turkey fighting against the Mongols. Caesarea, Trebizond and Adana were my 3 castles. When the front moved to the Middle East, and I conquered castles at Acre, Edessa and Mosul, the 3 in Turkey were converted to cities to start making me money.

3. Have A Professional Army In Each Castle. Obviously, you need to have a good military. I can guarantee you that if you make a the best possible stack in your castles that no normal faction will be able to match it man for man. Spending nothing on your town's military means that having whole expensive stacks sitting in your castles is not too costly, assuming you don't have too many castles.

4. Sort Your Navy Out. Naval domination is simple. I have 3 Gun Holks sitting in every port. In areas of military activity, I have a few 20 boat fleets there to really crush my enemies. Not only does a strong navy ensure your ports cannot be blockaded for long, but also it is easily affordable.

5. Develop Trade. This is the easiest way of making money. Make sure you have trade rights with as many nations as possible. Try to invest money in building large ports, paved roads, farmlands, mines and Fairgrounds. Then, you're laughing. Build a coastal Empire and watch the money flow in. There are several lucrative trading areas:
North Sea - ports of Arhus, Hamburg, Antwerp, Bruges, London, Nottingham and York
Irish Sea on BigMap - Dumfries, Caernarvon and Tara all earn you 6000 plus fully developed
West Italy - Genoa, Ajaccio, Florence and Rome
Adriatic - Venice, Zara, Durazzo, Naples, Bologna all make 7-8000 florins
Constantinople makes 8,000 per turn
Eastern Mediterraenean - Tyrus, Antioch, Adana, Acre, plus Cyprus makes you a pot of money.

This makes sense since Italy, the Middle East and England are historically known for being immensely wealthy traders.

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Apply all these rules and you'll have enough money to hire as many mercenaries as you like to temporarily bolster your forces in times of need. Economic power is more useful than any other in MTW2, you can always buy your way out of a tricky situation if needs be. You'll have so much money that you can play one faction off against another with gifts and you can bribe your way out of trouble.