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You want proper influence> Pledge yourself as a vassal.
Mercs shouldnt get high influence and imho shouldnt get influence at all.
I tested it just now, it still gave me the penalty.
Also maybe I'm doing something wrong then, because I find it really hard to make money as merc, I usually just do quests and hunt bandits for doing 3 or 4 caravans and buying workshops.
Still, my main point is that it doesn't really get lucrative being a mercenary because this influence drop is too much of a pain in the ass.
Also I didn't knew that donating trops and prisoners to garisons made your influence higher, I'll test with that later.
imo rn the influence system is kinda messed up. You will lose it if you get out of your faction, and being a merc should also be more balanced as being an actual option to play the game, not just a step on the social ladder.
I've found it to be pretty useful early on, I had around 30 influence with -5 (or a day) with 400 as a daily merc payment. All funded by harassing looters.
W/ merc influence it only increase your merc payment. This is a good way to train your army then gain influence with looter.
Influence increase it's value if you are vassal or a lord of an independent kingdom w/ Merc it's ok to loose influence unless you are dependent on merc payment.
You don't get to use influence, influence is money, each point = the amount you agreed, the faster it "depletes" the faster you're getting paid.
Imo, mercing could be a nice way for the player to try their hands on wars, without pledging as a vassal to someone & then being forced to break said pledge, once they decide to form their own Kingdom. But as it is now - too limited.
Got a 230 contract with battania the moment I hit the first clan level in my current playthrough, they were at war with 3 factions, I went from being broke and struggling to get 3k to start trading to 150k in no time, every time I delivered a haul of prisoners I'd get over 7k daily wages, plus all the loot and lord ransom, trading, fighting and opening workshops/caravans pale in comparisson.
The next level I became a vassal and I never felt poorer in this game.