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Aggressive patrolling seems to generate the most cash, often in the form of loot.
The key is to avoid buying anything unless you absolutely have to, and to be sure you buy it in the right place if you do. Most foodstuffs (except bread) are cheaper in the villages, but you need to pay careful attention to pricing which can vary a lot from place to place.
One or two items of loot will be of very good quality, the rest will be junk. Use the good items to equip your companions, and be sure to ask yourself which you need more: better equipment or this week's wages.
If you see a bandit lair, don't rush in to capture it: get the senior nobleman in the country to give you a mission to clear it out first. You'll get a chunk of cash and experience as a reward that way, which you won't get if you just storm it.
Running an army in Mount & Blade games is a little bit like running a business. You have to learn to balance revenues and expenses. It's not enough to find ways of raking in more money: you have to be sure that you're not spending it faster than you're earning it. Do you really need those extra recruits? Should you mindlessly promote someone just because you can? Revenues are hard to control, but expenses are the one thing you have absolute and total control over.
Most of my money comes from selling stuff I scavenge off of battle fields...helmets and such.
Then I get a good chunk of change from running errands for lords and mayors.
Tournaments are another excellent way to get yourself a much needed cash-injection.
The majority of my time is spent wandering from village to village, buying up cheap trade goods to sell for profit. All you need to do is pay attention to the markets in towns. Once you get your head around the basic ranges of prices for various items, you will be able to spot the best deals at villages.
Wool has always been pure gold in this game. You can easily get 10x your investment back from wool trading. That is insane! Then there are other things like iron, honey, even some food items. It's a matter of understanding the markets you can access and paying attention.
Hunting boar is another easy way to get some cash. Sure, it's pocket change but every boar brings in over one-hundred gold at most places. If you can get four or five of them at a time, that money adds up pretty quickly. It helps keep your army fed and you can feed the scraps to your dog (it never spoils either).
I'm landlocked in Britian and often go to ports just to look at boats and drool. Someday, I'll have saved up enough to buy one for myself and then I'll be into the real money. International wool trading is how you can build an empire. Oh and before some helpful person points out that you get a free Snekkja early on...I'm playing Sandbox.
Villages have the largest variations in pricing, they are volatile markets. This means the cheapest goods can be found there and the most outrageous prices too. Unfortunately, they are also broke, so the player cannot easily sell them anything. If you get into the habit of putting gold into their pockets on a regular basis, you might be able to sell them some honey for 700 pennings, one day. In the early game, just buy their deals (like wool for 27 p) and then sell it off at a city (for 300+).
If you can't make a living off of wool trading, you deserve to be broke. All it takes is time and effort. Ten times the profit is fantastic no matter how you slice it.
For the mid to late game, it's all about profitable business ventures in towns. Your fleet of ships will give you access to all markets so you can get the cheapest goods and sell them for the highest prices. Having money gets you lots more money, of course, but even a lonely wanderer with a wool hat and a stick can profit from wise trading.
(btw, DO NOT raid villages. This will make insane, bitter enemies of other lords, trash your reputation, etc. If you are playing a full campaign, it is best to avoid pillaging altogether. This goes double for holy places.)
Edit:You can even create a masterless men for killing them and taking their loots if you have well equipped prisoners .To do so you must have one bandit leader in prisoner and well equipped prisoners for good loots.If you have them,talk to bandit leader and order to attack random settlement or lord,then they are becoming masterless men.If you need soldiers,you can take them just giving money and losing some morale(much lesser than just taking soldiers from prisoners)