3 Ways to Grow Your Brokerage Account Balance to $100,000 By Age 40

The average 60-something has $112,500 saved for retirement, according to Northwestern Mutual. And frankly, that's not a whole ton of money to have by that age.

But accumulating $100,000 by age 40 is a different story. And if you're not sure how to get there, here are some steps that could make you more likely to achieve that goal.

1. Start early

Some people don't start saving and investing their money until their 30s or beyond. And it's easy to see why you may not be so inclined to start pumping money into a brokerage account in your 20s. During that period, you may be more focused on paying off credit card debt and trying to establish yourself in a career.

But many people graduate college by age 22. And if you're able to start saving and investing at that point, you might end up with a nice sum of money by age 40.

2. Choose quality stocks

One trap newbie investors can fall into is buying stocks because they're familiar with the companies, or because those stocks are seemingly popular. A much better bet is to do your own research to determine which stocks are worth buying. A company that's in the news a lot isn't necessarily a company you want to invest in.

So how can you tell if a stock is worth buying? Look for factors like how much debt the company has versus cash flow. And think about what the company is doing with its resources. Is it introducing new products and services or recycling the same old ones without innovation whatsoever? These are factors that can help you make sound choices.

3. Make sure you're diversified

It's important to maintain a diversified portfolio if you want to grow a nice amount of wealth over time. And you can do that in a few different ways.

First, you could simply buy stocks across a range of market sectors -- for example, fill your portfolio with not only tech stocks but also bank stocks, energy stocks, and retail stocks. You could also take an easier approach and fill your portfolio with broad market ETFs, or exchange-traded funds. These funds allow you to effectively own a bunch of different stocks with a single investment.

It really can be done

We've talked about ways to grow your brokerage account balance to $100,000 by age 40 in theory. Now, let's look at some numbers.

Let's say you start investing $200 a month at the age of 22, and your investments deliver an average annual 10% return. That's in line with the stock market's average return over the past 50 years, as measured by the S&P 500 index. If you go this route, by age 40, you should have about $109,400 -- more than $100,000.

Of course, there may be some months when you can't afford to invest $200. And there may be some months when you can invest more. So all told, accumulating a $100,000 portfolio balance by age 40 is doable if you commit to it early on and take the right investing approach.