John Cummuta: Transforming Your Debt Into His Wealth


You have no doubt heard the radio ads (I hear them every day on XM Radio) by John Cummuta, making seemingly impossible claims — you can be completely debt free, including paying off your mortgage, in around five-to-seven years, using just the money you already make. Wow! And they’re backed up by “real” testimonials. Well, as I always say, if it sounds too good to be true, it probably is. (See also: Is MagicJack a Scam?)

First, let's briefly examine the radio ad that’s getting a lot of airplay right now. There are several issues I have with it. Unfortunately, I can’t find a copy of it anywhere online for you to listen to, so I have to do this from the notes I have taken after several listens.

John starts by saying “mortgages should be illegal.” Well, I think most people would agree with that one considering the state of the industry and the vast amount of interest you have to pay. But then he says that, after interest, you will pay $400,000 for a $200,000 mortgage…almost a quarter of a million dollars.

Small point, John. Maybe in your world $200,000 is close to $250,000, but $50,000 is quite the buffer zone. It’s an old advertising tactic, playing with words in this way to make the numbers sound more grandiose. It’s one fifth of a million. This is done deliberately to play off a testimonial later on, when a man says “I’ll be able to pay off my mortgage in two-and-a-half years, on a thirty year mortgage.”

See what John has done there? He sets up the average cost of a mortgage as $200,000, more than doubles it to $450,000 with interest, and then has some guy saying he’ll be paying his mortgage off in less than three years.

This is all designed to make you think you can pay off a huge mortgage in just a few years using the money you already make.

Is It Possible to Pay Off a 30-Year Mortgage in Under Three Years?

Technically, yes. But common sense should override all of this for you. Think, for a second, how on earth is this possible? To pay off the $200,000 in just three years, assuming a low 5% interest rate, would mean a monthly payment of $5,994.18! That’s over $71,000 a year! How many people in America make $71,000 after taxes? And even if you do, the next three years will be pretty tough, as you’ll have no money for, well, anything else. No food. No heat. No cars. Just a huge mortgage payment.

Clearly, unless you’re rich to begin with, you can’t pay off a 30-year, $200,000 mortgage in just three years. This is a clear case of misdirection. The guy in the testimonial doesn’t tell you how much he owes on his mortgage, how long he has to pay it off, or what he earns. It’s a meaningless statistic. I could pay off a 30-year mortgage in one week if I just had one more payment left on it.

So How Does Cummuta's Program Actually Work?

Let’s look at the program more broadly. I've talked to several financial advisors over the last few weeks, and they know all about John Cummuta's scheme. It's not a scam in the true sense of the word. It does work, or rather, it can work if you have the money. But therein lies the rub, as you'll see later on.

The plan is based on the principal idea of debt snowballing. You list all of your debts, smallest to largest, and then commit to paying them off one by one. You pay the minimum on every debt except the smallest, to which you pay as much as you afford. When that's paid off, you add the money you were formerly paying on the smallest debt to the next-smallest debt, and again pay as much as you can afford. This creates an avalanche of money that consumes the debts as each one is paid off. It also gives you great satisfaction as you check each bill off your list.

Now, what I have just told you is the essence of the John Cummuta plan, a plan that costs a lot of money. When I called to inquire, it was five payments of $79.95. It could be more or less now; they may test different price models in different areas at different times. But $400 for advice you can find easily for free on the Internet, well, that seems pricey.

Can You Be Debt Free in Five to Seven Years? Let's Try It Out!

Does it even work? Yes and no. Let's model a debt plan using John Cummuta's method. I will use the median U.S. income of approximately $52,000 (PDF) for this plan.

I will also use the $200,000 mortgage that John himself uses as an example in his ads, and assume you have been paying it off for 10 years at 5% APR. And I will add some average debt, like credit cards and car loans.

Now, the debt figures: 

  • Mortgage: $162,000 at 5% ($200,000 after 10 years of payments)
  • Credit Cards: $14,000 at 13% — $420 minimum payment (3%)
  • Car Loan 1: $18,045 at 6% (This assumes the average $24,800 purchase price, a $415 minimum payment, and 50 months left of the average 72-month loan.)

And as the average family has two cars...

  • Car Loan 2: $12,540 at 6% (This assumes a lower purchase price of $20,000, a $391 minimum payment, and 36 months left of 60.) 

These are all based on averages I found. Some people have much more debt, including student loans, home equity loans, and so on. But we'll keep this simple.

OK, Let's Do a Debt Snowball!

Here's one I created using a debt snowball calculator online.

Adding no extra payments and using the figures above, it came to 115 months to pay everything off. That's nine-and-a-half years to be debt free. Not bad, and that's just using the money you earn right now. The combined debt is $2,299.00 per month, leaving your family a tight $801 per month for food, heating, clothing, and all those other household expenses. Something tells me you won't be adding much to your savings plan over the next 10 years.

But Cummuta estimates five-to-seven years.

Well, let's aim for the high end. Seven years.

To get everything paid off in 84 months, you'd have to add an additional $650/month to the debt snowball. That leaves an impossible $151/month to live off.

Want it paid off in five years? Hey, Cummuta can make it happen.

Just add an additional $1,620/month to the original debt snowball, instead of that measly $650.

YES! You'll be debt free in five years! But there is the tiny hurdle of figuring out how to survive on -$849/month. Reading Wise Bread may help, but surviving on negative $849 seems tough for even the most frugal shopper. 

For Most Of Us, Being Debt-Free in Five Years Is Insanely Tough (If It's Even Possible)

These are all just examples done with average U.S. figures. You may have more debt and more income. You may have less debt and less income. But the Cummuta plan seems to be one of extreme sacrfice to the point of having no life at all. If you want to become debt free in five-to-seven years, you'll have no social life, food will be scarce, you won't be able to afford to drive anywhere, no one gets gifts, clothing is out, and you may just lose your sanity, too.

Yes, debt snowballing is a good idea. I think it's a good way to pay off debt, if you do it right and set reasonable goals. But you don't need to pay John Cummuta hundreds (or tens of thousands) of dollars to figure it out. And please, don't set yourself a goal like five years unless you have some major income left over each month that you're stashing in a Swiss bank account.

Be careful everyone. Do your research on John Cummuta and other debt programs before you hand over your precious money to anyone. These debt elimination plans seem to be good for one person and one person only — the one selling them to you. 

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Guest's picture

Actually, John Cummata's program is a little different than Dave Ramsey's Debt Snowball. I actually thought John's program was the better of the two. I thought it was interesting that the author criticized Cummata's commercials for being "loose" with the numbers, but the author himself wasn't altogether spotless. As a financial planner, I can tell you that I can get numbers to say almost anything. To critique the plan using numbers that you made it is a little underhanded to me. I'm not saying that Cummata's program should be bought, and some of the assertions may be true; but, apparently this review isn't even based on Cummata's program but on programs like his, even though Cummata is singled out.

Guest's picture

Great article. I do know people who have done something sort of like this, but they only had a mortgage (no other debt) and did many things that seem sort of extreme to me (rented out every bedroom in their house+sleeping in the basement; almost always eating just rice&beans or the equivalent; having virtually no social life, etc.). For some people, it could be worth it, but most of us want to have a life that doesn't feel like prison.

Guest's picture

I completely agree. I tried doing some research because I was wondering how he could get away with stating that you could pay your mortgage off in 3 years. Yes, it can be done BUT like you said, it's going to take a lot of money, even if you make a healthy amount of money. While I haven't tried his program, I was thinking about attempting it.

Guest's picture

I have right at 100k of debt, with no mortgage. It's split evenly between credit cards and student loans. I will be free of credit card debt within the next 2 months. At that point, I will have 50k of debt. I have paid that in less than 15 months, on $15/hr. I think the debt snowball is ok, but my way is better. I don't know about this John person, or what he's offering, and I don't care to. Is it possible to get out of that much debt in his allotted time frame? Yes. I don't care what your calculator says. (I'm not financially stupid, I have an MBA in Accounting- for those thinking I'm stupid for having that much credit card debt, I'm stupid for allowing my then wife to manage my money!). I agree with what you say about being careful. Always do it yourself. The calculator doesn't take in some factors that make a big difference. My email is right there if anyone wants to debate this with me.

Guest's picture

I have no personal knowledge of the Commuta program, but I believe you should not review a program unless you've tried it yourself. It's terribly unfair to refer to something as a scam just because you have to purchase it at a price. Some people don't have the discipline or the knowledge to do things on their own, are looking for guidance and are willing to pay for it. That doesn't make it a rip-off.

Guest's picture

I have no idea who this cumuta person is but what he's saying is true. Your numbers are flawed. I make about $50k and my credit score is 715 median. I didn't qualify for a $200k house. I have nothing bad on my record. I have been with my job for five years If you are going to use a median income then use the house price median income earners would qualify for.

And two car payments of almost $400 each? No way. I don't care where you got your numbers from. There is no way a family making $52k would qualify. You are talking about a third almost of your take home income being used for car payments alone. That's not counting insurance, gas, maintenance. It's not realistic. Even before the banks got stricter on giving loans, they (most anyway) wouldn't loan you more than 35% debt to income ratio. 35% of 52k is 18-19k. And you have that on one car alone.

Use your own debt numbers and do the math. Use friends and families' numbers too. you will see that barring exorbitant medical bills or lawsuit payments, everyone's total debt is about the same percentage-wise to their income. To exaggerate, you are not going to find someone with 200 times their salary in debt without something very unusual having happened to them.

That's not to say that I agree with his sales tactics you mentioned above. And I agree that it is very important to do your research before buying such an expensive program. It is much cheaper to borrow or even buy one of the other "guru's" books.

But I don't agree that you will have no social life etc. My husband and I owed about three times our yearly take-home and we will be debt free in ten months, 3.5 years after starting the debt snowball system ( which I learned about from one of Mary hunts books). We go out to eat (not a lot). We go to the movies. We have iPads each and iPhones. We went to NC for a week last month. It's all about figuring out what you really really want and then finding a way to get it that doesn't derail your getting-out-of debt plans. 7 years is not unrealistic.

Guest's picture

There is a little trick that the banks do called "Front Loading". It is what a person agrees to when taking out a home loan or mortgage and that is to let the lending institution, be it bank, mortgage company, credit union..etc..., when you send in your mortgage payment. For the first several years of the life of the loan the majority of your mortgage payment is mostly pure interest. That is why when you take out a 30 yr mortgage on a home costing say, $100,000.00 , if you stay in the home and loan agreement for 30 years, you end up paying $300,000.00 . Now most folks know as the lending entity well knows and uses this very important point: Most folks buying into a home won't stay in the home for more than 5 to 7 years. Then the process starts all over again. When an extra payment is done, if done the lending institutions' way, "front loading" is done again. So, if a person sent in $100.00 of extra principal payment, a fraction of that is actually applied to the principal. The rest? You got it.... interest. Oh sure, the lending institutions won't tell you that. They will even deny it. Your monthly statement will show you paid that extra payment. What you will usually never see is on the back end how they gouged you. Remember, most folks live in their home from 5 to 7 years and move on, never seeing what really happen.But the fact is this is how the institutions make their money. There is a way to use verbiage that the institutions use that will ensure that the majority of the extra payment actually goes to "Principal Only", this allowing a faster pay off for a party serious about knocking out their mortgage payment and really becoming debt free. I know, because I've researched it and found the verbiage I use on my extra payment's coupon. I tested it. Works like a champ. You just have to know WHEN and HOW to make the extra payment. It is not by putting a check in the "make extra payment" box provided by the lending institution. But then again, it took some money (not so much) and testing. Glad I found it. Anyways, this is what this Mr.Cummuta is playing on. The credit card debt interest can get cut down considerably and relatively fast, making the same minimum payments, but in a certain way. Again, it's all in knowing HOW to and WHEN to make the payments. The credit card companies will scream bloody murder because they can't rape you the way they had planned. But they must take your payment anyway you make it. It's all in getting yourself educated in how this money world works and using it to your advantage. Believe me. The wealthy do this very thing.

Guest's picture

As someone who has watched a friend use this program I can say that it works. Its more then just a bunch of free ideas from the internet bundled together and called a program. Its about looking at you spending habits, motivating you to want to get rid of your debt, and showing you how to do it.
Maybe for his next trick the author of this article could write automotive reviews after watching car commercials! Also, in less time then it took to read this article I found the program used on ebay for $65.

Guest's picture
Walter I pay myself first every payday

I believe this person who called this a scam, will end up on welfare the rest of his life. John Cummuta was a person in trouble and found a way to get out of debt himself and he wanted to share the things he learned to help others. Yes it is expensive to purchase at $400. I found and purchased the program for $89.95 and free shipping.

John wants you to become rich! The way to do that is not give your money to a bank or credit card company. You have heard about real estate... Location, Location, Location. Becoming rich is Education, Education, Education. Do you know the definition of insanity? Doing the same thing over and over expecting different results.

Sir... This is not a scam its education. What is the price of stupidity, not buying this program. Stupid people have the right to STAY STUPID!!! Stay they you are I will not listen to you!

My prediction is this person will be poor the rest of his life. And he will teach his children to do the same.

My advice is buy this and learn from someone who has become a success!

Do what the rich do with their money. And you too will get the same results.

Guest's picture

I'm doing the John Cummuta program now and it works great! I bought the program on eBay for $75 incl shipping and it has turned my life around. My husband and I have $350K in debt (house, student loans, cars, federal debt & credit cards). We bring in $8,500 net monthly. In John's program, Transforming Debt into Wealth (TDIW) program, we will be debt free in Dec 2019 which will be in 8 years. One thing that the article doesn't mention is the Accelerator Margin. Ours is $425/month. So, we're adding that to our debt AND then snowballing from that point forward. All I know is that 8 years of focussed effort is a small price to pay for my huge debt. The program does a great job with telling youu the process step by step - and this article doesn't mention that either.

Guest's picture

These debt numbers are crazy and I feel bad for people that get themselves into debt like that. I thought we had a bad debt situation because of my wife's student loans and a mortgage, and that's all of our debt. No CC's, no car pymts or anything else. We make $150k combined, but until now haven't been aggressively paying off loans and we still have paid off $62k of student loan debt in 3 years (started with $140k at 7% - yikes wifey!). With a renewed focus, the other $78k should be gone in 2 years using the snowball method + extra payments. Then it is on to the mortgage - and that should only take an additional 3-4 years. If you have a good plan you can become debt-free quickly. Obviously it helps when you have a large income, as we are blessed to have, but I know many people who make much less and still paid down large debt quickly.

Guest's picture

I would like to know what mortgage calculator he is using, because when I figured it at 5% without the taxes and insurance, it came to about $386,000 over 30 years. That is of course with no money down.

Even with 20% down, you are still paying over $300,000.

I am guessing they have the interest and taxes in there with no money down, which most people may not be able to get.

Guest's picture

The only scam here is the author of this article. His numbers are manipulated in a way to try to prove his point rather than find if Cummata's plan work. At the end of his post he proves his own lack of honesty when he says:

"But you don't need to pay John Cummuta hundreds (or tens of thousands) of dollars to figure it out".

Cummata's DVD cost is $59, less than most people spend on their weekly Starbucks, not hundreds or tens of thousands of dollars. Once an Ad Man always an ad man?

But I have personal experience with the program, When I was the Manager of Training and Development for a major daily newspaper, we looked for a way to help our employees get out of debt, research had shown that debt burden was a major cause of stress that directly affected their lives both at work and at home. Financially unable to just hand out raises, also knowing that a change in spending habits and attitudes would be required, we researched and then chose Cummata's program.

Once implemented and in effect many of the younger employees carrying students loans and credit card debts were debt free in less than 24 months. Employees with mortgages and car loans, some with major medical were on track to be debt free anywhere from 48 months to 96 months. Yes, in some cases it took longer than Cummata's timeline, but they had substantailly more debt.

My wife and I changed our habits, implemented the program and celebrated being completely out of debt in 62 months, mortgage, two cars, credit cards, and taxes. All gone and we have never looked back.

$59? Worth 10 times that amount.

Paul Michael is wrong.

Guest's picture

The program works as long as the disciplines are followed. Math doesn't lie. Does the average person have the discipline to follow this plan, I don't know. But not for anything else but a good education on personal finances I believe it it worth the $400.00. These same principles should be taught in 12th grade before graduation.

Guest's picture

The author's analysis fails to take into consideration the reduced monthly payments resulting from additional principal payments. Mortgage interest is calculated on the outstanding balance. Most interest payments are made up front. As the principle is reduced, the amount of interest paid will also be reduced. Accordingly, this will shorten the amount of time required to pay the mortgage off completely.

I just reviewed Cummuta's program. I liked it and found it sound and helpful. I was also able to find his TDIW system on Amazon and e-Bay for around $20-$25.00. I think it is a great value at those prices. Thanks for your thoughts.

Guest's picture

This program worked for me. I will agree that it was difficult but I was very motivated every time I paid off a car or bike or credit card. If you have a lot of unexpected expenses, then this n au not work for you.

Guest's picture

John's system works. I figured it was at least worth a try. I am glad I did it. We are so much happier now with much less stress in our lives. Just get a separate checking account for debts. Pay off your debts with that money. You would have had to anyway. My husband told me I was the only one he knew who would get happy when the mortgage came in the mail. We became debt free 11 years ago. I would drive to the bank to pay the mortgage. If the interest was $300, that was $10 per day. Now people can pay online. I still would have a hometown bank be my lender so if I had a problem, I could just go there and solve it. I didn't have any problems at my hometown bank.

Guest's picture

I didn't pay anything for his program. I got it at the local library. What kind of American family would want to have two new car loans? If that is the average American family then no wonder we are going down the tubes. Have some fortitude America and self control! You don't need to have everything new. It is ridiculous.