Ways to Avoid Bankruptcy
I.Build your economy
A. Start out with allies
B. Upgrade your economy in your settlements
C. Capture the most valuable settlements first
D. Governors in every settlement
E. Use merchants effectively
F. Use diplomats effectively
II.Keep what you earn
A. Don't expand too quickly
B. Don't become a target
C. Watch your governors traits & corruption in settlements
D. Watch for rebels on land & at sea
E. Track your projected treasury & know its limits
The best way to avoid bankruptcy is to focus on your economy from the beginning. Start by starting with as many allies as you can get. Allies will give you more money for the things that your diplomats offer. Also, allies occasionally give you free tribute just for being an ally. However, the most important reason for starting out with allies is that it buys you time to actually focus on your economy. Besides, the first 30 turns should be devoted to taking the rebel settlements. When you do take new settlements focus on improving the economic output.
You should do this for your existing settlements as well. Dirt roads and ports will not only increase the economic productivity of your settlements it will also benefit your armies. You will almost always benefit from upgrading roads, ports and sea trade buildings. Next, focus on upgrading the market buildings. The other economy boosting buildings, farms & mines, should only be used if they are cost effective.
When taking the rebel settlements you should focus on the most valuable first. I will try to take all the rebel settlements that have a coastline unless the land locked settlements have valuable resources. Another way to quickly build your economy is to have a governor in your most economically valuable settlements. Governors can substantially increase the income of a settlement as long as he is a good governor (more on that later).
Learning to use merchants effectively will help you and it can even be used to hurt your enemies. If you have a merchant that is more skilled that one of the other faction's merchants you can try to acquire that merchant for some quick cash. If you attempt to acquire another empire's merchant you should make sure that your merchant has a significant skill advantage otherwise you may end up losing your merchant. Another effective way to use merchants is to only place them on valuable resources. This is not as easy as it seems though because other empires might try to acquire your merchants on the valuable resources. Some of the best and relatively safe resources are in the Islamic regions. Starting in the Moors' region just below Marrakesh on the African continent accessible only through Timbuktu (until you can reach the Americas) is Arguin. There you will find gold & ivory. You will also find gold & ivory in Timbuktu which is located south of the border between Marrakesh and Algiers. You can also find ivory in Dongola which is located south of Alexandria and Cairo which are south west of Jerusalem, but you might run into trouble from the Egyptian merchants, You can find more gold in Zagreb which is located east of Ragusa which is east of Venice, but the other empire's make several attempts to acquire merchants on gold in Zagreb. Stockholm & Oslo also have resources worth trading & it is a relatively safe place. Stockholm & Oslo are located north east of Arhus, Another agent worth learning how to use effectively is the diplomat.
Diplomats can be your best source of income. You can use your diplomats to to sell map Info, promises to attack rebels, promises to attack the enemy of your ally and settlements that are difficult to keep. You can sell map info any time you add a new settlement to your empire. You can almost always sell the promise to attack rebels. Since you are going to be attacking rebel settlements you might as well sell the promise to attack rebels to as many empires as you can. Also, learn to sell the promise to attack rebels to other empires BEFORE you decide to remove rebels bothering your settlements. This is really valuable in the early game when you need money to build up your settlements and your armies. Also, if you are at war, and you are going to attack your enemy you can sell the promise to attack that enemy to an empire that also has that empire as an enemy. For example, you are England and at war with the Byzantines and Venice is also at war with the Byzantines you can sell a promise to attack the Byzantines to Venice. It will earn you some extra money & improve your relationship with Venice. Using diplomats to sell settlements that are difficult to keep is very useful when it is possible. For example, when a crusade is called on Jerusalem I capture Jerusalem. Then I try to sell it to the Pope or another catholic or orthodox faction that does NOT have an army or an army with a general nearby. That way when they acquire the settlement it will only be garrisoned with mercs and no general causing it to riot and go rebel again the next turn. Since your army with the crusading general is outside the now rebel settlement you can recapture it. You might get lucky and the faction you sold the settlement to will upgrade the settlement before losing it. Just make sure that the faction you are selling the settlement to is not the same religion as the dominant religion of the settlement AND that the faction does not have an army and/or an army with a general nearby. That covers building you economy. If you followed the advice you should have a strong starting economy with plenty of spare cash for the next several turns. You might even be lucky enough to have so much spare cash that you could spend to your limit in every settlement and still have money left over. Once that is the case, you can proceed to the next section.
Your economy is strong and so is your army now all you have to do is keep it that way. First off, don't expand too quickly! I know it is difficult not to take every poorly defended settlement, but you must try not to do so until you can afford to do so. Otherwise, you will waste soldiers taking and retaking the same settlement. For example, playing as England, once I captured Stockholm it was extremely tempting to also take Riga, but I controlled myself. First of all because I did not have a spare general to govern Riga. Also, Riga's dominant religion was orthodox, and I did not have enough priests to change the religion to my religion. So, had I taken Riga I would almost certainly have lost it since it was primarily orthodox and I did not have enough garrison soldiers to make a difference in the public order. Even if I was able to hold Riga it would have developed at an extremely slow pace since it only had one structure, a wooden wall, and the population was not increasing. Additionally, the level of corruption would have been so high that it might actually cause me to lose money every turn. You should only attempt to take a new settlement once you have an army sufficient to take a new settlement and keep it well garrisoned AND still have enough units in reserve to guard your existing settlements. You also want to make sure that you have sufficient funds to upgrade the new settlement as well as your current settlements. There is not much value in taking a settlement if you do not have the cash to upgrade it. Besides, if another faction takes the settlement you can let them pay for the upgrades then just take it from them!
As I mentioned earlier, you don't want to leave your settlements poorly defended otherwise you will become a target. Becoming a target is the fast track to the poor house because you will lose your settlements and your armies trying to defend yourself. You will also lose trade rights with the empires attacking you. That can put a HUGE dent in the income of a settlement. Also, having a settlement under siege causes an equally HUGE drop in that settlement's income.
I mentioned earlier in the building your economy section about the economic impact of having a good governor, but the reverse is also important. Having a bad governor can cripple the income of an otherwise highly profitable settlement. So to keep what you earn you must keep track of your governor's bad traits. Equally important is tracking corruption in your settlements. As I mentioned earlier, high corruption can potentially cause you to lose money after taking a new settlement!
Another way to lose money needlessly is to be the victim of rebels. Look for black areas around your settlements and look for a sudden unexpected drop in income from a settlement that has a port. Both are signs of rebels/pirates. If you see black areas in a settlement, send a spy or a strong army to scout the area to locate the hidden rebels on land and destroy or move them. At sea send a strong navy to scout the sea lanes from the settlement's port and destroy or move the pirate fleet. The sea lanes are the dashed lines with tiny ships moving along them. Revenue lost from rebels/pirates adds up fast!
Finally, the most valuable advice on keeping what you earn is to track your projected treasury AND to know its limitations. By keeping track of your projected treasury you will know when you are about to go bankrupt and you can avoid it. However, the projected treasury is not 100% accurate. It may fail to detect a deficit which can lead to bankruptcy. I have discovered the following issues with the projected treasury: it fails to anticipate the coming of age of princesses and generals. Princesses cost $250 upkeep every turn and generals cost $200 or more depending on the size of their bodyguard per turn. That is $450 of unexpected expenditures you will have on the next turn. If you are low on cash and have spent all your income for this turn, and the projected treasury says you will have $100 balance next turn you will actually be in debt $350 if you have a princess and a general come of age on the next turn! The projected treasury also fails to account for the added upkeep of units you recruit on the current turn. For example, if you recruit 1 unit of peasant archers it will account for the recruitment price, but it will fail to account for the upkeep's impact on the following turn! Once the following turn has started it will then account for the upkeep of the recruited unit. So at the end of the current turn you think you have more money available for the following turn, but it is wrong. Another factor that is not anticipated is a slow farming season. Sometimes the income can be cut in half from farming. The projected treasury cannot account for the anticipated deaths of governors and merchants. As you have read earlier both governors and merchants can be very valuable income earners. It also cannot account for governors acquiring bad traits the following turn causing an unexpected drop in that settlement's income. The last two unexpected things that projected treasury cannot account for are new rebels/pirates impact on settlement income and a settlement coming under siege. It is important to note that the unexpected events not being account for in the projected treasury are not flaws in the projected treasury. Some of the events can actually be anticipated like a sieges, upkeep of newly recruited units, agents coming of age and the deaths of agents. However, because you can't really anticipate a slow farming season, a rebel/pirate surprise, or when a governor might acquire a bad trait, you might not want to completely deplete your treasury down to zero for any given turn just in case. Follow all that advice and you will be able to keep most of the money you worked so hard to earn.
Well, that's all the notes I have made for myself so far. I thought I would share them with you all since I saw so many posts about bankruptcy. I hope these notes are as useful to you as they have been for me.