In The Alchemist, explain how these words change the boy's life: “When you possess great treasures within you, seldom are you believed.”
While Santiago and the alchemist are traveling toward the Pyramids, encountering warring tribes, three armed men, Arabs, stop them to ask them what they are doing, where they are going.
The alchemist has possessions that puzzle the men and so he explains what they do. His answer seems totally outlandish to the men.
That's the Philosopher's Stone and the Elixir of Life. It's the Master Work of the alchemists. Whoever swallows that elixir will never be sick again, and a fragment from that stone turns any metal to gold.
Upon hearing this answer, the men laugh at him, and he laughs along. They allow the alchemist and boy to go on their way, with all of their belongings.
The boy is incredulous, asking the old man why he had told them the truth. The alchemist explains that when "you possess great treasures within you, seldom are you believed."
Since the three armed men could not imagine that what the alchemist told them was possible, they did not believe him. The alchemist is saying that even when you have treasure within, perhaps love or peace, people may not be able to believe that you have the treasure within that you say you do. For a better understanding, look to the start of Santiago's journey.
With all Santiago has learned, I think this lesson from the alchemist ties in with what the king had told the boy when he first learned about his Personal Legend. The king explains that sometimes people who are following the dream of their Personal Legend give up just before they are about to realize that dream.
The king says he is there to encourage Santiago because he is ready to give up. And perhaps the central idea is that because so many people give up on their Personal Legend, perhaps they cannot believe that others have achieved what they have not, so they don't believe someone when he speaks about great treasures within.
For gold is not the treasure. Riches are what the boy thought he was searching for at the beginning, but he is really searching for his purpose in life. Marrying Fatima is his treasure, as he readily admits, but he has been told by the king and the alchemist not to give up until he completes the search for his Personal Legend. The boy comes to understand this when he thinks of Fatima who is all the treasure he really needs, and she resides in his heart.
...now he knew where his treasure was.
The king's words help Santiago to realize that it's not the "stuff" you accumulate that is important, but the journey you take, the things you learn and the treasure you find within.
These words are spoken to Santiago by the Alchemist shortly after three armed men stop them. The men ask what Santiago and the Alchemist are doing and about their possessions. The Alchemist's answer mystifies the men, and he and Santiago are allowed to continue on their way. Santiago is mystified as well, and he asks the Alchemist about it. The Alchemist then says the quote that is in question. I don't think that Santiago's life was instantly changed at that moment from hearing that quote, but I do believe that the quote planted a valuable seed in Santiago's mind. He's had quite an experience thus far in his pursuit of treasure and his Personal Legend, but I do think that Santiago still hopes/believes that all of it will lead to a materialistic treasure. That makes total sense. Materialism, as a philosophical way of life, exists for a reason. People believe that having stuff and obtaining more stuff can be a way to human happiness. The good life can be had by having tons of money, a big house, lots of property, etc. Santiago is a shepherd, and I'm sure he has thoughts about having great riches in order to not be a lowly shepherd. The very notion that treasure isn't something tangible to be bought and sold is very foreign to people, and that is why the Alchemist's answer mystifies the men. Of course Santiago will eventually learn that his greatest treasures are indeed found within himself and in the relationships that he has with other people.