My group and I have played a lot of various Storyteller systems - Vampire the Masquerade, Vampire the Requiem 1st, 2nd and MET editions, Mage the Awakening, Werewolf the Forsaken, Exalted, Exalted vs World of Darkness, etc. One thing that I always enjoyed about the systems were how they handled and codified the weird character quirks and the externals of what a character is - the Merits, Flaws, Backgrounds, etc. It felt really unique back in the day being able to start a game as a character that is filthy rich, influential, or perhaps hunted down like a dog.
However, when the systems moved away from "GM may I get another dot" into letting players buy certain things with XP (as discussed last time), one big question arose - should the players pay for the various Merits they acquired during play (wealth, allies, artefacts, etc.)?
(if you're familiar with how these systems work, feel free to skip the next three sections)
oWoD - GM may I get a dot?
Let's start with how things started. In the Old World of Darkness game like like Vampire the Masquerade players could pick Backgrounds, Merits and Flaws at character creation. Backgrounds were things that didn't fit into Skills, Attributes and supernatural powers of a character. Often they would be things external to the physical person, like their wealth, allies, political influence, fame, etc. They could also be character traits that were hard to express otherwise, like a measure of Vampire's blood potency, Mage's memories from past lives, etc. To confuse things further, Merits were kind of also that, but as an optional rule and usually at a fixed price rather than 5 dot scale. These would cover being able to keep track of exact time, having an eidetic memory, having someone owe you a favour, being a really big person, etc. Flaws on the other hand were negative things that would hamper the character and gave you more freebie points, like being blind, hunted by someone, having an enemy, being averse to violence and so on. People often would min-max taking a maximum amount of Flaws to build their perfect character.
All of those things you could buy / pick at character creation and only change later through roleplay. You couldn't spend XP to learn more languages or to increase your wealth in V20 (some other systems handled languages differently, but that's a different story) - those could only be awarded by the GM as a result of the narrative.
In practice, people would rarely go back to those and update them. "We found a new guardian angel? Cool! I wasn't told to put them as a Mentor so I won't! Even if I did it wouldn't change anything, I can just call them, right?". If someone did want to update some Background, they would have to do the "GM may I?" thing and arbitrarily get a "yay" or "nay". You pretty much never got new Merits, and you'd usually shed Flaws connected to having an enemy after killing them, etc.
Because things were so wishy-washy, you didn't have people specialise in these things since you couldn't rely on the GM approving your point increases, so you mostly stuck to what you had at character generation. Things changed, however, with the next iteration of the system.
nWoD - everything is a Merit you can buy! (some limitations apply)
In the New World of Darkness (aka 1st edition of Chronicles of Darkness) the system got way more streamlined. You didn't have Flaws, you only had Merits that also covered Backgrounds. So you could be wealthy, influential, know telepathy, kung-fu, etc. all under the system of a Merit. Best of all, you could buy a lot of them with XP after character creation! The ones you couldn't buy were tied to rather innate things about the character - you couldn't grow an extra half a meter to take the Giant Merit, nor suddenly develop Eidetic Memory (unless you were a cool Vampire, then you had a separate Merit in Covenant Book Ordo Dracul "Mind of Devouring Worm" that was basically Eidetic Memory, but that's another story).
Now people could want to spend their XP on Merits since they often offered some interesting mechanical benefits - Fighting Styles augmented how you would engage in combat, Striking Looks helped you with social stuff, etc.
Things worked similarly in Exalted 3rd Edition, with an added exception of "Story Merits" - Merits that you couldn't purchase with XP after character generation. They could instead be awarded or advanced by the GM though roleplay and social influence. Those were things like Allies, Contacts, Mentor, Artifact, etc. Otherwise, you could still buy some Merits, like faster reflexes, languages, etc.
There was only one caveat to the base system in nWoD - if you spend XP on something and you lost it, that XP would be gone too. That was addressed in the final iteration of the system.
CofD - Sanctity of Merits and more mechanics!
In the 2nd edition of the system, all the game lines introduced the Sanctity of Merits rule, which refunded you XP you'd spend purchasing any Merit you lost. So if you buy a loyal retainer Alfred and he gets killed, you would get all that precious XP back and be able to spend it on something else.
I think by now also all Merits had some mechanical benefit to them. Status used to be a nebulous pull in an organisation, and now it turned into a bonus to social and an ability to block other Merits. Mentors had specific areas of expertise they could help with. The list goes on.
So finally you could have a character that specialises in Merits be not only very effective in a game, but also rest assured they wouldn't be downgraded to useless just because someone blew up the tower housing their home, people, place of business, etc.
So now we come to the crux of our problem.
The problem - narrative Merits
So the problem arises when you introduce Merits that can be earned via a narrative. Things like Resources, Mentor, Allies, Contacts, Status, Artefact, etc. How do you handle them?
When a character wins a hundred million dollars in a lottery because they cheated with their future-sight, does that justify them catapulting from Resources 0 to Resources 5 (granting them like, 10 sessions worth of XP)? If someone robs them afterwards and they go back to Resources 0, does that give them those XP points back even though they didn't earn them? Or probably the most important variant - if you kill someone with a cool artefact weapon and take it as your own, does that suddenly drain XP from you to make you purchase it, or do you get it for free? Is it magically protected from being stolen back if you purchased it at character generation in comparison to getting it later?
It is a tough question. Let's examine things one by one with some examples.
More money more problems - Resources
Your character hit it big. They won a lottery, robbed a bank or what have you. Now they want to convert that into more permanent, long-term wealth for their character.
In stories usually that's the character's end goal and you don't linger on what happens next. If real life is anything to go by, chance are a sudden influx of money will revert itself back to zero sooner than later. That makes sense - it takes a bit more than just raw cash to produce more cash in the future. Heck, even some countries have problems with this:
Even if you don't have to deal with people trying to rob you or con you, it can still be an issue. Doubly so when you're dealing with illegal funds you get from robbing a bank. Turning that into clean money and then into a legitimate income is an adventure in itself.
Resources are also often tied with one's standard of living and include a nice place to live, a good bank, credit score, knowing how much money you can toss around without going broke.
Heck, capitalising on your success and turning it into long-term wealth is a big thing in pro athlete scene. A lot of those people tend to earn a lot of money but end up going broke soon after they stop bringing in their income. The smart ones, like Conor McGregor or LeBron James leverage their cash and position to start businesses and so on.
So that's why I don't think getting an influx of cash should instantly translate to getting wealth / Resources on a character sheet. It takes effort and attention to grow those. Chronicles of Darkness did have a useful alternative for that influx of money though - Cash as a gear you can use!
Also, if you could turn money into Resources without spending XP, someone with Resources 5 could easily fund a few characters with Resources 2-3 without noticing a significant drop in their reserves. Why wouldn't every group do it in Session 1?
Mentors - it's a fine day for learning
Mentors are people that have interest in character's long-term growth and success. Some characters start their story with one, like Zuko and Iroh, others earn the privilege of learning from them during the series, like Goku and Roshi, Kami, Kai, Whis, etc. (man that monkey had a lot of teachers!).
So when you find a suitable Mentor that should be that, onto the character sheet they go, right? Well, it depends on what the role of the person is in the story.
On one hand you have rather transitory characters that exist to teach the character a lesson, some secret technique, etc. Aang had a good number of them. He chilled with most of them for an episode or two and moved on. Those kind of characters wouldn't necessitate being put on the character sheet - they are a means to spending XP on something else - a martial arts form or the like. You have a small adventure with them, this lets you spend your XP and usually you're done until you want to learn something else.
On the other hand, you have Mentors that stick around and offer support to the character over a longer period of time, not only showing them the ropes of how to do something, but also being invested in their success and maybe long-term education. Sometimes they guide the character's morality and stick their neck out to save them.
Those kind of characters usually take a bit more to be convinced to train someone and sometimes even when they want to teach the character it's not that easy. Take Shifu from Kung Fu Panda for example. Initially he resents teaching Po, eventually does so anyway but fails miserably, and only after discovering how to teach his pupil does he manage to get through to him, with dumplings:
There is also the trope with Mentors about learning "the secret technique". Usually only the worthy characters that have proven themselves are trusted enough to learn their master's final lessons. You have that with Shifu, Oogway and Tai Lung, where the student is denied the Dragon Scroll for not being worthy of it. Or heck, even in Asterix: The Secret of the Magic Potion Getafix withholds the final ingredient to make the magic potion from his student because he didn't respect the ways of the druids (and also was manipulated by the bad guy):
So spending XP on a Mentor would mean more than "this person will train you" - it means you did the legwork and have proven yourself to someone enough that they get invested in you and your success (and they learned how to teach you and get to you properly). Like sure, a lot of that might be better expressed through some kind of Social Links but in lieu of that, you have a commitment of XP.
This is further exacerbated if there are mechanics involved to having a Mentor. In Chronicles of Darkness a Mentor can do some amazing rolls for you and even be your sugar daddy. Suddenly being able to throw five private jets at the party because they got to know the recluse billionaire might be a bit much (they are probably antisocial and wouldn't want to hang out with a whole party of adventurers in the same room ;) ).
Similar reasoning might be applied to Allies and Retainers - an Ally might work with the group because they trust one person that actually put in the leg work, but not the whole group. A Retainer works for one person and isn't everyone's gofer.
So okay, where does that leave us? I think we're mostly down to magic swords!
Characters and their signature items - artefacts!
A number of characters in popular media come with some signature gear. Sometimes things are rather mundane, like Indiana Jones' whip and fedora, and sometimes they are much more intricate and unique, like Sword of Light:
Lesser gear comes and goes and there isn't much need to spend XP on them. But let's look at some more important magical items.
One category is items used for pretty straightforward powering up. They don't serve an important narrative in themselves, and eventually you even forget they are there. Demon's Blood Talismans for example weren't part of Lina's original kit, but after acquiring them to be able to cast some more powerful magic they mostly just became a background item.
Perhaps a more well known example might be Sokka crafting his meteor sword:
For the character, crafting the sword was a culmination of a bout of training with a swordmaster. In game terms you could express this as spending some XP on skills, fighting technique, etc. and adding a signature weapon to the character that would be either a good piece of gear or some minor artefact.
Sometimes characters pick up a magic item and wield it pretty easily pretty fast (like Thor and Stormbreaker in Endgame, probably since that movie was so long already...), but sometimes it is a process. In Book of Boba Fett we see Din struggle mastering the Darksaber:
Which might be a good basis for a mastery of an artefact being tied to spending time and XP on it.
Even if you get artefacts for free in Exalted, that's just the start of your journey. Many of them come with so called Evocations - special powers you gradually unlock by investing XP into them that someone wielding it for the first time wouldn't have access to.
Of course, things get a bit more complicated when you have a system for making artefacts also built into the system that is separate from the regular XP system, which is again the case with Exalted. The crafter spending their resources making some cool blade for the fighter would justify not spending XP on it, but if you want to treat it the same as someone who did buy a similar artefact at character creation and if they both end up getting destroyed and Sanctity of Merits kicks in, who gets how much XP? This can get a bit more complicated if you had to pay XP regardless and a crafter just facilitates you getting the kind of artefact you want?
Conclusions
In at least some instances it makes sense for characters having to "pay" for the windfall they receive as a part of a narrative. It keeps things consistent when it comes to Sanctity of Merits, and it keeps the numbers fair between the players (loss aversion and being jealous someone got something for free that you paid for can be an ugly thing). Things get a bit more complicated when dealing with artefacts and characters that can make them on the regular.
