This phrase, though used all the time, is often not understood in it's fullest and most true meaning. The wisdom behind it is timeless and has literally been around forever presenting itself in many philosophies and perspectives, but they are still just words. Because words can't give you the exact experience behind them, the true meaning is often lost.
How the hell could everything really be good?! It sounds crazy from a lot of perspectives. We've got poverty all over the world, war, natural disasters destroy places like Haiti, and lots of misery and suffering in peoples daily lives. So how can anyone in their right mind say, "It's all good?"
One answer is 'contrast.' What are your favorite stories, movies, or books? Take a second and think of one. There's no doubt the story you are thinking of has a person or people who are being affected by horrible events or circumstances. If there was no trouble, there would be no story.
As simple as the idea of contrast is, it can sometimes be difficult to see the things we don't like as the things that give value to the things we do like. Literally, if there was no 'bad', there could be no 'good'. Just as with all opposites, they are indivisible.
- If darkness did not exist, light would not be perceivable because it would be a constant.
- If silence did not exist, sound would not be perceivable because it would be a constant.
- If pain did not exist, pleasure would not be perceivable because it would be a constant.
Because there will always be some kind of a contrast in life, it's our choice to accept it and choose to focus on the part we like. What is focused on expands in your experience.