The Silversmiths is one of many financial literacy stories by Doug Weller. It tells the story of what happens if you forget to pay yourself first when trying to save your gold coins.
Financial literacy stories can be powerful for illustrating the lessons of financial freedom. In this series, in these financial literacy stories, you will meet explore a familiar fairy tale world with remarkable characters and magic. There’s action, and drama, and love, and sometimes a happy ending. Enjoy all these financial literacy stories.
Stay to the end of the story to read a little about the lessons contained with in this story. You can find more Financial literacy stories here.
Now, if you’ve got some popcorn, and the dog is sleeping at the end of the bed, let’s begin…
The Silversmiths by Doug Weller – Financial literacy stories
There once was a lad called Jacob, who loved to work hard for the only silversmiths in the village.
At the end of another day of work, Jacob was preparing to leave for home when the chief silversmith called him to her office.
“You are my best worker, Jacob” the chief silversmith said. “You work hard all day, every day, and every customers appreciates your work.”
Jacob was a modest and kind person, who didn’t need praise in order to do a good job.
“It is no trouble,” he said. “I am happy to work hard. After all, you pay me well for my efforts.”
The chief silversmith nodded in appreciation. She gestured to a leather pouch on the table.
“This pouch of gold is you earning for today’s work. Use it wisely.”
Jacob thanked the chief silversmith and reached out for the pouch. As he was about to leave, the chief silversmith called him back.
She stretched out her back and sighed.
“Oh Jacob, I love my job here at the silversmiths, but my hair is turning grey. I am old and soon I will look like I should retire.”
Jacob was sad at this news, because he loved his job working for the chief silversmith.
“Who will the new owner of the silversmiths be?” he asked, hoping he would not hear bad news.
“You, Jacob.”
Jacob stared at the chief silversmith in shock. He was about to thank her, but she held up her hand.
“I would like to sell this silversmiths to you because you love this work as much as I do,” the silversmith explained.
“But, I never dreamed of becoming the owner of this silversmiths,” Jacob said, “and I fear I have no gold to pay you.”
The chief silversmith looked surprised.
“Surely I have paid you generously for all of the years we have worked together. Are you certain you have no gold coins saved?”
“All the gold I ever earn gets spent,” Jacob replied. To prove the point, Jacob pulled out his pockets and showed that they were empty. He had nothing apart from that days pouch of gold.
He turned to leave, but the chief silversmith once again called him back.
“May I offer you some advice?” she asked. Jacob confirmed he would be delighted to hear it.
“You advice is always good,” Jacob said.
The chief silversmith sank back into her chair and exhaled.
“Every day, you work had and I pay you gold. If you saved a few gold coins every day, in a years time, you would have enough to buy this silversmiths from me.”
Jacob was delighted at this advice. Counting gold had never been his biggest strength.
“In that case, I will save some gold every day as you’ve advised,” he said. “And, in one year, I will have enough to buy the silversmiths from you.”
“That’s the spirit,” the chief silversmith replied. “Now, have a safe journey home, and remember my advice.”
Jacob left the silversmith and walked through the village on his way home.
After only a few steps, he found himself passing the local greengrocers.
“How can I help you today?” the rosy-faced greengrocer called out.
“Nothing today,” Jacob replied, “because I am saving all my money.” He held up his pouch of gold at the greengrocer.
“That’s a pity, especially as turnips are on offer today,” the greengrocer replied. “And carrots are cheap too. You could make yourself a delicious soup with them.”
The offer tempted Jacob. He did have food already at his home, but it was always good to have more food. I have to eat, thought Jacob, and I have plenty of gold in my pouch.
So he paid a few gold coins to the greengrocer.
A few steps further on his way home, Jacob stopped outside the local cobbler.
“How can I help you today?” the cobbler called out.
“Nothing today,” Jacob replied, “because I am saving my money.” He held up his pouch of gold at the greengrocer.
“Ah, well, that is unfortunate,” replied the cobbler. “I happen to have a fresh supply of leather delivered just today, and I could have made you a fine pair of leather shoes.”
Jacob looked down at his shoes. They were a little worn, and no longer looked as new as they once had. I deserve good shoes, thought Jacob, and I have plenty of gold in my pouch.
So he paid a few gold coins to the greengrocer.
A few steps further still and he reached the local tavern.
“How can I help you today?” the landlord called out.
“Nothing today,” Jacob replied, “because I am saving my money.” He held up his pouch of gold at the greengrocer.
“Saving is indeed a wonderful thing to do,” replied the landlord. “You obviously work hard to be able to save so much. Why not take a seat at my bar and enjoy your success?”
Jacob looked into the tavern. It was busy with people eating and drinking after a hard a day at work. I have deserve to relax a little, thought Jacob, and I have plenty of gold in my pouch.
So he paid a few gold coins to the landlord, and took a seat at the bar.
The man he sat down beside had a wiry red beard, and a glint in his eye.
“You look like a person who wishes he had more gold,” the red-bearded man said.
“You’re right. I am saving money every day for the next year so I can buy the silversmiths,” Jacob confirmed.
“That is an excellent thing to do,” replied the red-bearded man. “Perhaps you might like to learn of a way to double your savings in half the time?”
Jacob was interested because a year already sounded like a long time to save gold.
The red-bearded man leaned in.
“I have here a two-sided amulet,” he explained. “Every time I spin the amulet, you decide whether it will land on the star, or on the cross. If you guess right, you will double your money.”
Jacob excitedly agreed and placed a few gold pieces on the bar in front of the red-bearded man.
“I predict the amulet will land on the star,” Jacob said.
The red-bearded man spun the amulet, and, sure enough, it landed with the star facing upwards.
Delighted at winning some extra gold piece, Jacob thought it would not be long before he had saved enough to buy the Silversmiths.
“One more game,” the red-bearded man suggested.
This time, Jacob put up few more gold pieces, and predicted the amulet would once again land with the star facing upwards.
The red-bearded man spun the amulet, but, this time, it landed on the cross. Jacob watched as his gold pieces were taken away.
“Never you mind,” the red-bearded man said. “You can try again tomorrow.”
Jacob thanked the red-bearded man, and then headed for his home.
Sat at home, he began to daydream about owning the silversmiths. He felt so proud to have been offered this chance by the chief silversmith. All he had to do was save a few coins every day.
“I wonder how much I have saved today,” he said to himself. He pulled out his pouch and tipped it over the table.
But not a single gold coin came out.
“Ah well, I may not have saved anything today, but there is plenty of time before a year is through,” Jacob said. “I will just try harder to save tomorrow.”
The seasons tuned and a year had passed faster than anyone could have imagined.
Once again, Jacob was preparing to leave after another day of hard work, when the chief silversmith called him to her office.
“So, Jacob, one year has passed,” she said. “Today, my hair is fully grey, and I look ready to retire. Tell me, how much gold have you saved?”
Ashamed, Jacob pulled out his pockets. They were empty.
With amazement in her voice, the chief silversmith asked, “But did I not tell you to save gold every day?”
Jacob nodded, sadly.
“I tried so hard to save my gold, and yet, when I came home every day my pouch was empty,” he explained, then turned to leave.
The chief silversmith called him back.
“May I offer you some advice?” the chief silversmith asked, and Jacob confirmed he would be delighted to listen.
“You advice is always good,” Jacob said, then added, “even when I fail to follow it.”
The chief silversmith rubbed her eyes, and sighed.
“There are many ways to spend your gold, Jacob, but only one way to save it,” she explained. She then raised her hand, and listed all the ways people spend more money than they need. “People will buy more than they need, and spend more on each thing than they need,” she said. “People will replace possessions before they are worn out. People will choose entertainment over saving, and people will gamble their money away in the hope of making more.”
Jacob frowned, because he recognised he was guilty of all these ways of spending too much gold.
“You are right. There are many ways to spend too much gold. I know this better than anyone. But tell me, what is the one way to save it?”
The chief silversmith leaned closer.
“All gold is saved until the day it is spend. Saving is the act of not spending. So you must pay yourself first. Each day, as soon as you receive your gold, take a few coins and keep them separately from the rest. In this way, you will save. Do you now understand?”
Right then, Jacob saw the truth.
“I have been a fool,” he said, forlornly. “I forgot that the only way to save was to not spend.” He shook his head. “And because I am a fool, I cannot afford to buy the silversmith from you today.”
The chief silversmith smiled.
“You are a good man, Jacob,” she said. “I do not plan to retire today.”
“But, your hair is grey!” Jacob said in surprise.
“People should not retire because they look old. They should retire only if they no longer love the work they do. I will keep working until I no longer love what I do. And on that day I will retire.”
“So I have still time to save my gold?” Jacob asked, excited.
“Until the day you retire, there is always time to save,” the chief silversmith said, and passed a bag of gold to Jacob for his day’s hard work.
The Silversmiths – Financial literacy stories – Coda
Jacob is a great worker, who is appreciated by his boss, but he had a fatal flaw. He is no good with money. Every new shiny thing attracts him.
First, he buys more “essentials” than he needs because there are offers available (which there always are), and the food sounds tasty.
Then, he buys something even though he doesn’t need it – new shoes even though he has perfectly good shoes already.
Next, he spends to relax rather than save, without thinking about whether the short time is worth the long term costs.
Last, he gambles his money, hoping to get rich quick.
These are all routes to overspending, so rather than controlling his spending, Jacob manages to spend everything that he has earned.
His syndrome is sometimes related to the Marshmallow experiment. The experiment showed that people who are able to delay gratification are more successful and happier in their lives than those who seek instant gratification.
Jacob doesn’t even realise he is an instant gratification seeker. He thinks he is just no good at it.
The advice to pay yourself first is to actively delay gratification. By separating some money before you spend on anything else, you are trying to trick your brain into think you have less available, and so spending less as a result.
The chief silversmith reminds us that saving is simply the act of not spending. It isn’t complicated or hard. You don’t need to have a special bank account in order to save. The difficult bit is, you have to reduce your spending in order to save.
Want to read more Financial literacy stories?
These Financial literacy stories are written to teach lessons about mastering your money in a fun way. Sometimes, reading dry financial advice can be a little dull, or too complicated at first glance. These fairy stories aim to refresh the parts that other types of money advice miss.
You can read more Financial literacy stories here. Why not start with The Young Man with Red Hair – financial freedom fairy stories?
And while you’re here – why not learn more about the building blocks of financial freedom?
You could also learn more about marshmallows and delayed gratification.
