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Is Transforming Debt Into Wealth Possible?

Is Transforming Debt Into Wealth Possible?

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Daniel Cohen
UpdatedJun 13, 2024
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    5 min read
Key Takeaways:
  • Review the basics of John Cummata's Transforming Debt Into Wealth?
  • Examine Cummata's average monthly personal debt estimates.
  • Check the alternatives, if you are struggling with debt.

Will John Cummata's Transforming Debt Into Wealth Work for Me?

Are you struggling with debt? Do you have goals beyond just getting rid of your debt? Most everyone wants to improve their financial position. How to use money wisely, build financial security, and get out of debt are among the most common financial-advice topics, year after year. John Cummuta's Transforming Debt into Wealth is one of the most popular debt-advice programs available, with over 2 Million people paying for Cummuta's advice. Will it work for you?

Transforming Debt Into Wealth- What is It?

Transforming Debt Into Wealth is not just about getting out of debt, but how you can use the same method to pay down your debt and then build wealth. Cummuta claims that you can,

"Get completely out of debt (including your home mortgage) in just 5 to 7 years -- and start building real wealth from the first month -- using nothing more than the money you already make!...Even if your credit cards are maxed out and you have a huge mortgage to pay off, you can still get rid of all your debt in about five to seven years, save thousands of dollars of interest -- and begin rapid wealth-building -- without sacrificing the things that matter most to you!"

Sounds pretty good, doesn't it? Paying off your credit cards and your mortgage in a short time, on your current income, without a major sacrifice?

Transforming Debt Into Wealth offers a lot of solid, common-sense advice. The basic advice is to:

  • Not spend more than you earn
  • Spend wisely, avoiding purchases you don't need
  • Put as much as you can afford to pay off your debt
  • Build your savings and retirement, once you are debt-free


Cummuta recommends that you use what is called the debt snowball technique, but he uses a different name, "Margin Accelerator."

You list all of your debts and target the debt with the smallest balance, making your required monthly payments on the rest. Once you pay the smallest debt, you take every dollar you were using to pay it and put it toward the next smallest debt. As you move down your list of debts, more and more is being applied to the remaining debts, so you can bring them down quickly. Once all your credit debt is paid, you apply the same strategy to your car, then, after your car is paid off, to your mortgage.

While some may advise you to pay the highest interest debt, it is hard to say that the snowball or Margin Accelerator approach is a bad idea. If you have extra money to put towards your debts, then it is an excellent strategy to employ.

Specific Example

Cummuta gives a model case in a document titled "5 top 7 year payoff Substantiation", to illustrate how his program can work. He uses statistics from different authorities, including the Federal Reserve, US Census Bureau, and the IRS.

Cummuta uses an example of a household earning $62,500 gross and has a take-home pay of $53,125. According to his estimates, the household would carry an average debt of only $6, 387 per year in debt payments for housing, vehicle, credit cards, and other debts! The monthly mortgage principal and interest payment in his example is only $251!

Do you know anyone who is paying a mortgage payment of $251 per month? Essentially, using averages, Cummuta lays out a scenario where the average person has a lot of disposable money to pay down their debt and then apply to building wealth. If only it were so easy!

Not For Everyone

The Cummuta solution does not apply to everyone. There are millions of Americans who are unable to pay their current bills each month, let alone pay extra money to pay down their debts faster. For these individuals, transforming wealth into debt has to wait until their debts are under control or their income increases.

People struggling to pay their monthly bills, facing foreclosure, or dealing with IRS tax problems need more than just basic budget advice. Yes, making a budget is an important first step. Cutting out unnecessary spending is a smart choice, as is paying off your debt and not accumulating more debt. But, if you can't make your minimum payments today, snowballing your debt is not going to solve your debt problems.

Cummuta's professional advice does not come for free. You can pay $399 to get a package of CDs, DVDs, manuals, software, and a one-on-one personal consultation. Not only does he sell different packages, you will receive solicitations for services where the fees can run over $10,000. Paying someone a fee for basic, common-sense advice is also not a smart choice.

Can't Make All Your Payments?

If you've fallen behind on your payments or feel that you are about to fall behind, you should examine all the basic debt relief options, including credit counseling, debt settlement, and bankruptcy. Each of these solutions has good points and bad. One may be ideal for you or none of them may be right. If you read about your various debt options and understand how they work, you can find the right one for your situation. Once you put your debt behind you, you can move on to build a solid financial future. Building wealth once you are debt free is easier than transforming debt into wealth.

Did you know?

If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q1 2024 was $17.69 trillion. Student loan debt was $1.60 trillion and credit card debt was $1.12 trillion.

A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.

Collection and delinquency rates vary by state. For example, in Indiana, 17% have student loan debt. Of those holding student loan debt, 9% are in default. Auto/retail loan delinquency rate is 4%.

To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.