Very frequent question
Basically it comes down to the following:
1. Sailing
a. Captaining your own ship with decent crew
b. Joining public ships
2. Playing Cards (if you have lots of cheat cards and are good at it)
a. Blackjack (Tutorial http://www.piratesonlineforums.com/f...ead.php?t=5941)
b. Poker
3. Defeating enemies
a. The higher level, generally the more they are worth.
b. Hang out at Kingshead and 'sweep' the pack (with cutlass) while another pirate levels their Voodoo Staff.