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??