Keeping score is important in finances. You only know if you're making progress toward your goals if you've created a plan that tells you where you need to be and when.
Essentially, there are two numbers to focus on: your total net worth and your liquid net worth. The distinction comes chiefly from the fact that most of the average American's net worth rests in their home, and everybody needs a place to live. If you own it, under normal circumstances, you can't readily sell it to raise money for living expenses.
Liquid net worth, on the other hand, refers to the assets owned that can readily be converted into cash to meet expenses. These are the kinds of assets people normally draw upon to meet their monthly expenses, both anticipated and surprise, in retirement.
In some cases, the basic formula is the same:
Net Worth = Assets minus Liabilities
Assets are what you own, and liabilities are what you owe - essentially, debt of any and all kinds. The reason people keep track of their total net worth is usually for estate planning reasons (i.e., who will be the beneficiary of what items after you pass on). Again, your liquid net worth is a more accurate measure of how much you can spend without altering your lifestyle, especially in retirement.
A sound financial plan defines several important data points. These include the date you need to fund a future expense or expenses, how much money you will need to generate cash to meet them, and by how much your current resources need to grow each year to meet that principal value. It's from this information that you can generate a series of annual interim goals for that principal value. These are the scores that you need to meet or beat to be winning the contest toward meeting your goals.
In order to do this annual review properly, you need to determine the current value of your assets. In some cases, such as the value of your savings and investment accounts and cash value life insurance policies, this is relatively easy to do. In the case of less liquid assets (and sometimes this can even refer to some assets in your investment accounts), establishing the current market value can be difficult. Things like collectibles, a business you intend to sell, or vacant land fall into this category. To the extent that you are relying on these to meet your long-term goals, it's worth securing professional appraisals every few years, and then more frequently as you approach the date you'll need to convert them into cash.