I would say the first step to getting a solid Master League Squad is to wait out the first year as best as possible, then do a detailed search to find out which players are in the final year of their contracts. Then you can bring them in for no transfer fees during the final transfer window of the season and have a beast ready for Season 2. If you have trade players enacted, then I would trade some of your stiffs that they start you out with like Nachdegal and Ximenez for a guy like Alex, who has remarkable stats and whose salary is comparable to these stiffs. For defenders, I like Yobo as a cheap alternative (also can be traded for close to even money for some of the rubbish players they start you with) and Samuel as a shut-down backliner but not as fast(same as above). Boumsong is also cheap and solid at the back. But Alex is the real deal as a super-cheap performer you should be able to bring in at the first transfer window, either on a trade or (if you've sold some guys off and have some dough) a solid transfer. Reyes is a good cheap midfielder. Check out some of the Americans also, Landon Donovan and Beasley are good players that can be had cheap, and Friedel is one of the better goalies in the game.
The key to getting better fast is to use the trading option and also set the general settings level for the other teams' willingness to deal fairly high. You want offers for some of the guys on your squad so you can get that money and go buy real players.
Remember, don't be afraid to take on salary. The real costs come in to play on the transfer fees. If you do well in the Cup matches and can sell off some of your guys, the salaries won't be an issue. And like I said, at the end of the season you can make offers to players in the last years of their contracts with no transfer fees, so you must take advantage of this!!! This will give you a buzzsaw of a team in season 2 and allow you to start worrying about making more changes for season 3!!!
Good Luck.
The Baller