How I Made It podcast: Michael and Matt Heine tell the story of Netwealth – The Australian Financial Review

Yet to get it off the ground Michael Heine had to take on the big banks. That took a bit of bravado.

“Entrepreneurs are wonderful creatures; they believe their own bullshit. That can be a good thing. And it can be a bad thing,” Heine says.

“You have to try to sort out what’s real and what’s imagined. And it didn’t seem such a big issue at the time. Certainly, people regularly said to us, ‘Look, BT are spending $100 million a year on it and technology, how do you think you can possibly compete with that?’

“But it seemed like it wasn’t going to be such an issue. We had assumed that we would invest $5 million out of our own pocket in building this business, and it would take three years to get to break even.”

That $5 million and three years assumed by Michael Heine turned out to cost $35 million and took him more than five years.

“It was a lot of shoe leather, a lot of hard work, a lot of commitment,” he says.

‘Had to start from absolute scratch’

Michael Heine comes from an entrepreneurial bloodline. His father Walter arrived in Australia on HMT Dunera, with his well-heeled life in Leipzig in eastern Germany nothing but a memory.

Illustration of Gebrueder Heine shopfront in Leipzig, Germany, circa 1850.  

Walter, the heir to the Gebruder Heine textiles fortune before Adolf Hitler altered the course of history, was released as an enemy alien after arriving in Australia, where he joined the army before starting what would become one of the country’s biggest global commodity trading businesses, Heine Brothers.

“He was demobbed, had no money, very little English language, no contacts, no established business, and had to start from absolute scratch,” Michael Heine says.

Michael joined the business after his father noticed his son wasn’t spending as much time as university as he should have been. Michael gravitated to financing activities. Then, when he was 29, his dad died. Walter was just 62. Michael and his brother Leslie continued to grow the company, which diversified across several asset groups.

At one point, Michael Heine was the owner of commercial radio stations. He put down a $1 million deposit in a deal that would later deliver a $40 million profit. It was the late 1980s and rather than pay tax on it, he converted it into a 25 cent equity stake in Hoyts, which was on an acquisition spree.

Walter Heine (centre) with sons Leslie (left) and Michael. 

“Then the …….