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They drop decent loot, sell well to slavers and you got a small chance of capturing a ship what you can often sell for a couple of thousand.
As for best troops, what's most cost effective very much depends on your style of playing, your character, and your party skills. My wife and I play a combat character who has over 16K personal kills (combined killed/wounded) and have all medic skills at 10+1. On the field we combine a solid shield wall, highest level archers, and expendable cavalry. As we hardly ever lose infantry (because they are tough) and archers (because we do not let them fight) AND consider cavalry either immortal (companions) or expendable (everyone else) our favorites may not be yours.
In any case, we use:
- Frisian horsemen (because they take only one upgrade and can be recruited for peanuts from Frisan villages we befriended in the storyline.
- Norse shield infantry (because it is plain better than anything else, and hard to kill)
- Female archers (because they are dirt cheap, trainable by companions, provide a morale bonus, and because their fragility does not matter)
But it is beyond any doubt that, for example, Norse warrior archers are much, much, MUCH better than Camp Defenders, even if you take into account the higher price. They can give many Tier III or IV shield infantry a good fight in melee... but that's not their job, so we do not care.
In the same way, there is some pretty damn good rish and Pict 'almost heavy' cavalry. But we use our cavalry to control the enemy's movement, and keep the archers safe and the infantry victorious. Our non-companion cavalry dies often enough that it is not worth the time and cost to field the good ones.
To save money put all of your most expensive troops into a garrison. This will reduce their wages greatly. Only bring them out when you really need them. For most fights you can make do with mid to low level troops. For capturing a new fief with a large garrison of enemies, go ahead and take your best troops.
I like to use a mix of Norse infantry with 2/3 spearmen and 1/3 companion infantry. They are very effective but I do not know about cost effectiveness since Reforged edition has changed some things. I put spearmen in front and try to sweep my infantry in to one of the flanks from behind them.
I like to collect some Norse Archers but they take so long to train up that I often fill with Finn Archers. Finn Archers are so good that they actually steal a lot of kills at range from my faction troops but suck in close combat. Overall I try to keep about 10% of my force as archers. they work great against lighlty armored troops but are less effective against heavy infantry with shields so I do not rely on them too heavily.
I tend to just make companions into cavalry and have few others. Cav is expensive and only useful for land field battles. I do a lot of sea and siege battles where they are a waste. I also always choose pagan and I have not found any pagan cavalry so each unit I bring will hurt morale slightly. I try to maintain 95%-100% pagan troops to avoid morale penalties. A handful of Christian cavalry is manageable though. I kind of like the Marchoc (sp?) Celtic cavalry because they have good thrown weapons. This means I can lead them past the enemy for a few passes and still stay out of spear range. I often get enough just by rescuing prisoners or recuiting my own prisoners so I never have to bother actually training them. I use cavalry to harrass enemies in the rear and to run down isolated or fleeing troops.
You can sometimes buy them from a farmstead or win them in a tournament.
Its more a useful thing for the early game as butter sells for 90-100 gold and can spawn several times in a week (or none at all if it is luck based).