This precept can be thought of as the thorough knowledge and understanding of the Four Noble Truths as a whole. It's the kind of understanding that comes through personal experience. That means that it doesn't matter if you read ten books on Buddhism and can recite things from memory. You need to feel it and know it in your bones. This usually takes repeated exposure to the knowledge, contemplation of the knowledge, and regular practice of the "spiritual exercises". Don't be hard on yourself if it takes you a long time to come to understand Right Understanding from the inside out. At the same time, that's not an excuse to slack off. Right understanding is a facet of wisdom.