I think it's time to start a new game in Mount & Blade Warband. I just went back to it a day or two ago and don't remember what my current character's goals were, or who all I was aligned by and that was a new-ish character anyway. So I'm going to create another Arena Built Commander.
What is a Arena Built Commander you ask?! Well that's simple, Put most of your initial points into commander friendly traits and skills, such as increasing how fast you can move your troops, how quickly they can be trained (Training should ALWAYS be your priority skill), their survival rates when KO''d etc etc at the expense of your own fighting abilities. Keeping in that theme, whenever you level up then try to put at least 75% of your points into commander friendly skills such as those mentioned earlier. You're looking to be a commander of troops, not just another soldier yourself, right? "But what about your own fighting skills" you ask?! Boy you're full of questions but I'll answer anyway. Use the arena to level your combat skills, not only do you not lose anything when you get knocked but it's an easy and reliable way to get cash, as well as leveling up your weapon skills. Weapon skill wise I fully recommend completely ignoring two handed weapons in favor of a sword/board and crossbow build.
Once you've gotten a few levels under your belt then you should be able to take on bands of Looters and other low level enemies by yourself. That's a reliable way to earn cash (via selling their junk) and again it levels up your combat skills fairly quickly since you're taking on multiple enemies by yourself. Once you've properly outfitted yourself with medium level equipment and gotten used to fighting groups of enemies on your own then really you can easily take on anything but groups of Archers/Crossbowmen. Pikemen can be a pain but if you've focused on leveling up your crossbow skills (which you should have!) then you can just keep riding away from them and sniping them before they get within twenty feet of your horse.
Once you've gotten used to fighting groups of enemies on your own and have gotten some good equipment (get the best armored horse you can, and the best crossbow you can use while mounted) then you're ready to put your commander skills to use, and you should have plenty of money to hire troops as well. Since you've put most of your skill points into army friendly skills you'll be able to have a fast army that levels up insanely fast, allowing you to always be able to quickly rebuild if a fight goes the wrong way, as well as always having elite level troops.
Once you get to the point where you can turn village recruits into mid level quality troops in just a few days and into elites in a few weeks, all of the world is in your hand. Want to join a faction and help them rule? Go ahead. Want to start your own faction (or defect from one)? Go ahead, you'll be able to have the army to back you up. Just one last bit of advice: Preferably focus on a sword you can use with a shield, and always use the best shield you can buy, and always keep a crossbow handy. Why? Because you're not going to be charging into every fight head on, no you'll want to stay back, do some sniping and be able to guard yourself at all times. The battle is only ever over when you're on the ground, you're the commander not some random grunt, don't forget it.