It's Gold *or* XP

"Gold for XP" is a concept from older editions of D&D. Essentially, characters get 1 XP per gold piece of treasure they acquire. 

The exact implementation of this concept varies between editions, retroclones, and individual DMs. Sometimes the characters get the XP as soon as they get the treasure. Sometimes they have to bring it back to town. Sometimes they have to spend it to get the XP. That might mean carousing or buying fancy clothes. Sometimes there's a training cost involved in leveling up.

My main issue with the gold for XP approach is that often, the character is getting both the gold and the XP. Even if the character is required to spend the gold, they're still gaining the XP from spending the gold in addition to whatever they spent the gold on, whether it be equipment, jewelry, NPC contacts, or whatever. The gold/XP is a double reward.

There's also simply isn't enough to meaningfully spend gold on in D&D - there's plate armor, hirelings, spell components, strongholds, and maybe magic items (although almost every version of D&D attempts to tell DMs that they should definitely not allow the purchase and sale of magic items, they never really provide any desirable alternative use for unwanted magic items or mountains of gold). 

In a gold for XP game, the DM has to juice the treasure being awarded to ensure the characters are advancing at an engaging rate. And in versions of the game like AD&D, when XP requirements were much higher, those numbers have to be juiced quite a bit. There isn't that much to spend money on, unless the players are really enthusiastic about playing house, throwing feasts, fielding armies, and the like. I'm personally into all of that stuff, but I've barely ever encountered other players who are.

In a gold for a XP game, I want the players to have something to spend their gold on, and I want that to be a choice. I don't want to handwave it and say "You throw it all away partying." But I also don't want them to have the jewels/stronghold/magic item and the XP.

It's gold or XP. That is, players must decide to convert gold to XP on a 1-to-1 basis. This way, player characters have something to spend their gold on (XP), and they have to choose whether they want the gold or the XP. They can't have both.

To use an example, an Old School Essentials fighter comes back from the dungeon with 2,000 gold's worth of treasure - exactly enough to reach 2nd-level. However, the fighter has to convert all of their gold into XP in order to do so. They might want to spend some of it on plate mail, or they may need to recruit new hirelings. If they spend any of the gold, they can't level up. They have to make a choice.

Every single use for treasure now comes with this same drawback and becomes a choice: Would you rather bribe that NPC, buy that magic item, and build that stronghold, or put all that gold towards your next level?

A character who spends their gold on material things will have fewer levels, but will be richer in equipment, land, and connections. A character who spends their gold on XP will be inherently more powerful but lacking in material wealth. A 9th-level fighter with a stronghold and an army is more capable of affecting change in the world than a 20th-level fighter with nothing.

Gold or XP also allows for differences between players and groups to emerge. The player who chooses to kit out their character will be slightly behind the ones who focus purely on progression. And, assuming equal division of treasure, any discrepancies are the result of how the individual players choose to spend their share of gold. 

A particularly cooperative group of players could even choose to contribute shares of gold towards ensuring a certain character levels up, if it's in the group's best interest. For example, if a 9th-level character dies and a new one joins the party at 1st-level, the surviving characters might pool their resources to bring the new character closer to their own level. Or, if the cleric is just shy of reaching the level when they can cast raise dead - which the other players agree it would be in the party's best interest to have access to - they can pool their money towards getting the cleric to that level.

I'm not particularly concerned with how to rationalize this in the fiction of the game or whether it "makes sense". It is purely a game abstraction. Sometimes I'm hyper fixated on the game's fiction and what mechanics narratively represent, and sometimes I don't care.

If there must be some logic to it, one could define it vaguely as "training expenses", although I think it's difficult to justify the fighter spending 120,000 gold in order to train and gain...2 hit points. There are certain things in D&D which simply have to be accepted as abstract game elements.

If I were to go the training route, I would definitely make that something the characters must seek out and devote time to in the fiction, however. For example, a wizard who wants to attain 2nd-level could train under the 4th-level hedge wizard in the starting village, but that same wizard would have to travel to the megacity's magical academy to attain 20th-level. This also requires having access to competent NPCs who are willing to tutor the character.

As for how long training takes, it could be one week per level to be gained, or maybe one week to gain a Tier 1 level and four weeks to gain a Tier 4 level. That could lead to some cool moments where after training for five months in their distant corners of the world, the Avengers-style party gets back together for One Last Job.

If I end up playing any edition of D&D this year, I'll definitely be taking this for a spin. I would most likely do this with Old School Essentials. The official adventures give out a lot of gold, but the rules don't really present much at all to spend it on. It could also be fun with 5e, particularly because I feel I've gotten the hang of pricing magic items for sale in that edition, which is where this type of choice would really shine, but I'm trying to play other games this year.