A “taxable” account or non-qualified brokerage account is often viewed in a poor light, but it really deserves a much better name. More than half of my retirement assets now reside in our taxable account.
It turns out there are a lot of advantages of a taxable account, including tax advantages. They definitely should not be ruled out as a good way to invest for retirement and other expenses, especially once you’ve maxed out IRAs, 401(k)s, etc… for the year.
You can get at the money anytime you choose and spend it on anything you want, with no restrictions. You don’t have to wait until you’re 59 1/2, you don’t have to spend it only on education, and you don’t have to borrow from it to access the funds.
You can buy stock/ETFs at many brokerages for basically no commission. If you go directly to a mutual fund company, particularly a low cost one like Vanguard, you can buy their lowest expense index funds.
You probably shouldn’t, but if you wanted to you can get a “margin” account, which allows you to use leverage to magnify the upswings (and, unfortunately, the downswings) of your investments.
When your investments pay you qualified dividends (most stock and stock mutual fund dividends), you get to pay taxes on it at a lower rate than usual.