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In my opinion the golden chili and paladin are the best things to spend your LC on. You can make it through the game without the other classes, but I’m surprised you don’t use your Sea Dog. He does more damage than any other bird and when you use his Gang Up skill he does even more damage. The bad thing about the Sea Dog is that he isn’t well rounded so since you are forced to use a pig ally in the caves you won’t use the Sea Dog very often except on the levels where there are only enemies with charge attacks. Opening up the Friendship gate to get the Marksmen is well worth it. Don’t bother with the Thunder Bird because he costs 275 LC after you open the gate. The Marksmen only cost snoutlings after you open the gate.
The Priestess doesn’t cost any LC and the Avenger doesn’t either. Currently the Avenger is free after you collect enough stars. Some people really like the Priestess, but I don’t think anyone likes the Avenger.
I agree that upgrading the cauldron or anvil is a complete waste of LC.