Having a spare $40,000 sitting in the bank account is nice, but it's painful how little interest it will earn. A 3% interest rate isn't going to compound its way to $1 million quickly at all.
The best thing to do would be to invest it in Australian companies that pay fully franked dividends. Here are four companies that I think would be good to invest $40,000 or $4,000 in:
WAM Capital Limited (ASX: WAM)
WAM Capital is the main listed investment company run by Geoff Wilson and his very successful investment team.
It invests in small capitalisation companies that are most likely to grow quicker than the market, but it also has a handful of strong large blue chips as well. It keeps a good amount of cash on hand for protection against market crashes and also for ammunition if there are good opportunities.
WAM Capital has delivered a total shareholder return of 85% over the last five years. It has grown its dividend every year since 2009 and currently has a grossed-up yield of 8.33%.
NIB Holdings Limited (ASX: NHF)
NIB Holdings is one of the larger private health insurers in Australia. It has good exposure to all the healthcare issues, not just one underlying treatment like Cochlear Limited (ASX: COH).
It grew its number of policyholders by 6.4% in the half-year to 31st December 2016 which drove earnings per share higher by 65.5%. I think it can keep taking market share from its competitors and grow total policyholders, particularly with its partnership with Qantas Airways Limited (ASX: QAN).
The NIB Holdings share price has grown by 294.5% over the last five years. NIB has grown its ordinary dividend every year since 2012 and currently has a grossed-up yield of 4.34%.
Japara Healthcare Ltd (ASX: JHC)
Japara is one of Australia's largest listed aged care providers. It has a large and growing portfolio of facilities to look after the elderly with a number of greenfield and brownfield projects in place.
Management are expecting to add at least 1,000 new net beds over the next few years and want to soak up as many of the 76.000 new beds required nationally over the next decade.
Once the issue of funding from the government is sorted over the next couple of years, Japara should be able to provide a growing profit and dividend for many years to come.
Japara is currently trading with a grossed-up dividend yield of 8.08%.
Seek Limited (ASX: SEK)
Seek is Australia's leading job portal with expansion plans for many other areas of the globe.
It is working hard to make the most of Zhaopin and expand its online education offering. Job seekers and employers will always be lured to the job portal where there are the most jobs on offer and the most potential job seekers.
Seek has grown its dividend every year since 2009 and the yield is currently 3.85% after being grossed-up.
Foolish takeaway
I like all four of the above businesses and all four will most likely provide strong dividends over the years ahead. However, there are many more high quality dividend paying stocks out there. Ones that the Motley Fool's new service, Everlasting Income, is looking to find for you and take the stress out of managing your capital and income.