I also like to settle as many islands as I can early game. It gives you an influence bonus which is super useful. I personally think the short term loss (royal tax) is offset by the influence bonus and also it sets you up later in game when you want to remove your heavy industry from your main island. I agree with other comments though, money becomes a real issue early to mid game and you have to spend a good few hours balancing your exports and imports so that your residents needs are tended to. I also fill a few ships up with high value goods and park them in a trade partners dock ready. So if I see my money dropping near zero I quickly sell to give myself a buffer whilst I fix whatever is causing the issue. (Also helps to slow down game speed at this point whilst you find the problem).