"Good understanding produces favor, but the way of the treacherous is hard"
This is the Hebrew word sekel which means understanding, but it is not the usual word for understanding in the Proverbs – that is bin.
The focus here seems to be on the understanding of the reason why certain things happen. Solomon is saying that when you really grasp the reason why a certain thing happens consistently, then you will be able to produce a favorable result.
This is the Hebrew word hin which means grace or favor or gracious. The point is that the process of being blessed is in your control. The whole of the book of Proverbs is that secret book that we have always wanted to read which tells us why life works the way it does; what the secret rules are; and how do we change things so that we can be blessed. This book is the book for getting in touch with the ways to build a blessed life.
Solomon, through his observations of life and people, has really applied a "scientific method" to people. He penetrates beneath the surface and shows us what we need to know in order to escape the forces of "luck." So many people just feel at the mercy of what happens to them. Solomon teaches in this proverb – as well as in the whole of the book – that you don't have to stay there. If you will focus your mind on grasping the connections between things and the reasons why things happen the way they do, then you will be able to bring blessing and favor to your life and home. Too often we just think that it is luck or fate or even God's will that picks one to be successful and another to suffer immeasurably. While there is a measure of circumstances and uncontrollable things, the vast amount of what happens to you is in your control. You have the ability to choose to be wise or to be foolish. You can make choices that will bless you or curse you.
Notice what he is saying here in this proverb. If you really understood why this thing happened or consistently happens, then you could make sure that the good side of it happens to you. What I see often is people unwilling to change; plowing through marriages blaming their spouse; people repeatedly being fired or quitting and blaming their bosses or the companies; parents blaming the influence of friends, T.V., music, and movies in their children's lives and then doing nothing about it; teens who regularly get bad grades and rebukes from their parents and menial jobs all the while blaming the system instead of doing any penetrating analysis.
God is screaming at us through Solomon: YOUR LIFE IS IN YOUR HANDS – MAKE THE RIGHT CHOICES AND YOU WILL LIVE A WHOLE DIFFERENT LIFE! This is true whenever you begin making the right choices. Some people don't grab a hold of this until they are in their 20s, some in their 30s, and some in their 50s or 60s.