if i do all the mind reading up front, i get stuck in level 1 for a very, very long time due to a massive XP debt. And enemies become tougher and tougher to face as they level up while I remain level 1.
While being lower level make you gain more XP and thus there is a catch up factor, in the end you will still be a few levels behind by the end of the game, which is painful and really totally unnecessary.
What I did here was I used the training arena in Farglow to get my XP up to 99, then I mind-read everyone worthwhile in Broken Valley. I had to solve the drunken patrons in the bar quest to get some more people, but I avoided levelling up. Then I went and killed off goblins and such. That maximixed the experience I got from killing enemies.
There's more than enough enemies in the game that mind-reading won't impact your level noticeably. If you're really concerned, quicksave before mind-reading someone and load afterwards. There are also various jewelry pieces with +Mind Read, put those on.
I also mind-read most people in FoV, and at one point I had an experience debt of over 278,000. As I turned in quests and entered combat, it vanished fast, enemies at about my level were over 4000 experience each.
It's a good rule of thumb to always mind-read non-humans.
Farglow
Edmund = Learn the location of the key 2 unlock the treasure chest by the house 2 the left of the bridge (on the side where u meet Morgana), Penalty = 1 exp (Mindread 1 point)
Gerald = new dialoge option that gets him 2 lower his prices, Penalty = 3 exp (Mindread 1 point)
Alternatively, you can also mind-read a girl to find out that Gerald likes to read, which gives you a new option to give him your quest item book you start with. It also costs 3 exp, though.
Broken Valley
Village
Martis = The location & password 2 the bandit camp without having 2 do the quest 2 free him, Penalty = 1050 exp (Mindread 1 point)
This works, but it's probably better to do that the normal way because you get experience and items - including
a skill book hidden in a secret room.
Arnold = The location of a belt, Penalty = 40 exp (Mindread 1 point)
Note: The belt is pretty terrible. It gives 0.06 Mana Regneration.