Psalm 1 stands as the gateway to the 150 psalms (or songs). If you were paying attention as you read the opening three verses, you probably noticed there are two competing sources of information vying to instruct us in how to live our lives: (1) the counsel of the ungodly, and (2) the law of the Lord. The person who learns to delight in "the law of the Lord" finds the way to prosperity--not necessarily prosperity in the sense of money and possessions, but true prosperity in living life as God intended for it to be lived. As Jesus stated it in John 10:10: "I have come that they may have life, and that they may have it more abundantly."
The person who knows Jesus Christ as Savior has life, but the Lord's desire is that our lives be lived abundantly. That implies a life that is lived according to righteousness, a life that carries the imprint of God's blessing. The greatest goal for any Christian is to live a life in which the Lord is glorified, and that means living our lives in imitation of Christ Himself.
So how do we learn how to live such a life? By meditating in God's word "day and night." Have you ever watched a cow standing or lying in a field, chewing its cud? The cow is chewing what she ate earlier. (I'm really glad we don't do the same thing). Meditation is something like that. As we spend time in God's word, we give ourselves something to think about throughout the day. The more familiar we become with it, the more we have to consider. As it becomes a part of us, we soon find that our thoughts are guided by God's own thoughts rather than the thoughts and ideas the world labors to program into us. Our thoughts, our decisions, our choices, our responses to others, all gradually become guided by "the law of the Lord", and we begin to realize the prosperity in our lives--the more abundant life--that Jesus promised.