Well there's ways to exploit if you want. One method is to have an army full of Rhodok sharpshooters. Siege, hold ground outside until you run out of crossbow bolts, retreat, resiege. Keep doing that until the entire garrison is dead.
However, if you only have 40 guys, you should not be trying to start your own faction. You will get destroyed by the other factions very quickly. I'm assuming you have a very low right to rule rating? You need to increase that before you think about starting your own faction. Otherwise everyone will declare war on you.
Also, buy up enterprises in every town you can in order to increase your weekly income. This will offset your troop wages. Increase your leadership skill if you haven't. This will lower your troop wages by up to 50%.
Religion is regarded by the common people as true, by the wise as false, and by the rulers as useful.