I am new to investing

[gmj3307]

Being a reader of MMM for a year now I am learning that my fear of investing is costing me money.  I am working on "self-insuring" meaning, putting away savings that build up over time to cover my deductibles, etc.
Right now I have the following "self-insurance"
For Pet Insurance: $200 - sitting in normal bank savings acct. earning .01%
For Car Insurance: $2150 - - sitting in normal bank savings acct. earning .01%
For Homeowner's Insurance: $10040 - sitting in online savings acct. earning .90%
I have other savings but I want to keep the discussion about the above "deductible/self-insurance" savings.  Basically, I have my deductibles pretty high so that I minimize my premiums (thus increasing my stash) but the money is there so if a crisis hits, I can cover the deductible.
*Note no health insurance deductible as it's covered by my husband's employment.
I think where I am keeping this money is costing my money.  I could move it to a 4% OPP (optional paid up life insurance) to increase my dividends there, or I am thinking that maybe I should invest it in a low-risk Vanguard Index Fund.  My research shows me that 75% bond/25%stock is "safe" enough to grow this stash but I am so scared to lose it all if the market fails.  Also, if I need to liquidate it, I have no idea how to do that if it's invested.  Maybe a ETF?  I don't know. 
My husband and I work very hard and are very conservative with our money.  I am finally comfortable with the few investments we have (Roth IRA, 1 traditional IRA) but I am so scared to invest this money and lose it all. 
Is my thinking correct that since the probability of using this money is "low" that investing it is wise?  Or should I keep it in my "Nothing" bank accounts?
Help??

[Reepekg]

In my opinion, it is OK to recognize that you have a conservative investment style. The whole point of financial independence is being able to not worry about having enough money. If keeping your deductibles in cash helps you sleep at night, go for it.

That being said, you need to learn how to put your money to work so you can enjoy investment income at some point. It sounds like the fear of losing money you might need is holding you back. Since you are new to investing, try saving up a set amount of money earmarked for "investing." If you invest $1k and it all goes terribly wrong, the worst that can happen is you lose <10% of your net worth which you can save back up in no time.

What I suspect you'll find is that your $1k is super boring and fluctuates by a couple percent. You'll gain knowledge and confidence over time and gradually increase the amount invested. At that point you can pull your little employees off the beach and put them to work like theoretically optimal.

[brewer12345]

Not to spook you, but bonds have risks, too.  I get that you are conservative, but you need to realize that the best way to get some return and deal with risk is to diversify.  There are a lot of ways to do this.  I would suggest that you have a look at e following funds: PRPFX, VWELX, VWINX, MERFX and ARBFX.  They are various flavors of conservative funds. Pay close attention to returns over time and performance in the downturns of '08-'09 and 1999-2000.  I also would not invest all of your deductible funds in risky assets.  A good half should be in either www.penfed.org 4 year 2% CDs or in I bonds.

[KingCoin]

Your post touches on many issues ranging from the size and nature of emergency funds to portfolio construction and risk management. Without writing a 20-page treatise, I don't think anyone is going to really get you to where you need to be in terms of teaching you to allocate your capital wisely. You need to pick up 4 or 5 introductory personal finance and investing books, read until major concepts start to make intuitive sense, and come back with questions. You probably weren't looking for a homework assignment, but there's really no substitute for educating yourself on these topics.

In the meantime, sitting on ~$13k of cash might not be ideal, but it's probably not a disaster if that's the bulk of your liquidity.

[gmj3307]

Which basic investing books are recommended? A quick search on Amazon gave a lot of choices.

[Will]

http://www.amazon.com/Investors-Manifesto-Prosperity-Armageddon-Everything/dp/1118073762/ref=sr_1_1?s=books&ie=UTF8&qid=1384927341&sr=1-1&keywords=investors+manifesto

You can get it from the library, too.

[alanwbaker]

Being a reader of MMM for a year now I am learning that my fear of investing is costing me money.

Bill Bernstein's book is a good starting point.  If you appreciate this forum about the mustachian lifestyle, you'll appreciate the Bogleheads forum about investing.  http://www.bogleheads.org/wiki/Getting_Started. There are a lot of helpful people over there, including Bernstein.

[aj_yooper]

Welcome to the MMM forum!  You are rational and a good saver and are concerned about covering your various insurance deductible costs (liability matching) while looking at improving your return on the self-insurance funds so you are on your way. 

I would suggest that you get started by reading at the Bogleheads' site:  http://www.bogleheads.org/wiki/Getting_Started  They have arranged a lot of excellent personal finance and investment advice in one spot.  They are very straight forward.

[KingCoin]

Random Walk Guide to Investing - Malkiel
Investing for Dummies - Tyson

[Eric]

I think Jim Collins's stock series is a nice primer:

http://jlcollinsnh.com/stock-series/