This verse in Proverbs is based on what has been said in the previous three verses before it. It has to do with the simple or naive person (whose simpleness is due to being foolish) as opposed to one who is sensible. Let's look at these two today - not just in light of this verse - but in light of the previous ones as well.
We are told that the naive or simple inherit foolishness. This is because they act like and think like fools. Going back to verse 15 we see that these people "believe everything" and do not consider where their actions and choices are taking them. Verse 16 reveals that the naive one is both arrogant and careless. They do not practice proper caution but walk headlong into evil and godless choices. They do not consider what God says about these things, either ignoring Him or arrogantly thinking that they know more than He does. Finally we see that they are quick-tempered - and because of their quick temper they act foolishly in the midst of their uncontrolled passions. They resort to evil plans and deeds - and are hated because of these things. When you consider the full picture of the simple, naive one who bases their life not on God's Word, but rather their own flawed reasoning, you see why God says that their inheritance will be foolishness. They do not take the time to think - to consider the end of the matter - to calm themsevles and think rationally about the actions they are about to take. Thus they are fools - and what comes to them is the fruit of their own foolishness and stupidity.
We are also sold though that the sensible one will be crowned with knowledge. Some call Christians simpletons and people who have a low I.Q. This is not the case - at least with the Christian who adheres to Scripture and who has gained wisdom over time. The true Christian does not shun study or knowledge - they embrace them. As they spend more and more time in the Scriptures - and specifically the book of Proverbs - they will become very wise, discerning, and knowledgeable. The word "sensible" here is the Hebrew word "arum" which means to be prudent. The idea here is that this one "takes careful thought" before doing things. He takes careful thought of his ways according to Proverbs 14:8. He takees careful thought before he acts according to Proverbs 14:15. In Proverbs 22:3 and 27:12 we are told that a man like this sees danger before it happens and avoids it. Thus this man walks with God in a way to where God's counsel is received and understood. This protects him from many things that would harm him.
The promise here is that the prudent/sensible man will be crowned with knowledge. The word knowledge is the familiar word in Proverbs that deals with our lifestyle from the standpoint of the choices we make. The word is "daath" which means to have a knowledge that gives us discernment, insight, and a notion about what we are doing - and how it will end. The word spoke of a way of living and choosing, thus it was known as the word that meant a person's chosen lifestyle. This points us to the reality that when we live by a prudent, biblical thinking and reasoning way - we will be filled with a knowledge that grants us discernment and insight. We will even have the function of "notion" as well - which simply means that over time we will just sense at times that something is right or wrong.
All this is said with the idea of being crowned with this blessing. Thinking and reasoning biblically will crown our minds with both wisdom and discernment. We will be able to know the difference between two choices - two ways of doing things - the simple idea of right and wrong. The world wants to blurr these lines of distinction. They want there to be little of no way of knowing truth of error, right or wrong. The world wants us to think everything is relative to a situation. But God's Word is true. God's Word is right. God's Word is sufficient to not only guide us in the big decisions of life, it will be what the Holy Spirit will use to guide us through every day. As we are guided - we will note that we are often crowned with the right choice - the right discernment - the right notion of which way to go. That is the blessing of being sensible and reasoning according to God's ways.