The Virtue

[Psycho]

Given these two choices, I'd certainly take number 1. In the second scenario you spend 120 design points to get +7% income and +7% chance of good events. It's too small a gain for all those points. Plus you get less supplies and more encumbrance on troops.

I'd go misfortune 2 and neutral temp and get more design points to spend on magic paths. Also I'd take death instead of earth. Mystics cover the earth-astral combo and you have no mages with death. And if you take death go D5 for the fear effect.

Something like:
Dom 10, O3 S3 Misf2 Magic1
A4S5D5