Legatus Legionis
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We use training by RAW... That and living expenses are an important gold sink for PC's. 7 years in, and everything has balanced out OK.
One thing that seems to be overlooked though is that if you actually follow the 1st ed RAW then you only accumulate experience when returning to civilization... I suppose if you were to get really technical you gain XP for killing monsters on the fly (though we've never played that way), but honestly in 1st ed 90% of your XP comes from treasure anyhow, which doesn't award XP until it is 'safe'... So if you are clearing out the lost tombs of who-zat for six weeks of game time and roll back into town having accumulated enough XP to put you well over the amount you need to level up then you don't loose out on anything as long as you train up before heading back out again.
Yes.
Players had to get so many thousands of gold to advance. (monster XP could be really paltry). Training acted as a vacuum to suck up that gold.
I always felts a "wine, women, and song" rule where PCs got the XP for spending the gold was the best alternative.
The problem with wind women and song is that it is already pretty well covered in the living expenses. I mean when your fighter hits 7th or 8th level and rolls into town he's spending thousands of gold a week on living expenses alone. I have a hard time conceptualizing spending more than that without seriously channeling John Belushi's coke addiction.