Editor's Note: This article was written by James Quinn, a senior director of strategic planning for a major university. James has held high-level financial positions with a retailer, homebuilder and a university in his 22-year career.

For the last three decades, millions of Americans have been living in Beverly Hills. But how can this be?

Only 35,000 people reside in the actual city of Beverly Hills, California, but millions have acted like they live in Beverly Hills -- where the median household income is $125,000.

The median household income in the US is $50,000. There are 116 million households in the US; only 12 million households have an income of $125,000 or more, and there are 60 million households making less than $50,000.

But why shouldn’t the 60 million households be entitled to live like the top 10%? This is America, where the American dream of wealth and riches is achievable. Just one small problem: Millions have chosen to live like the privileged Beverly Hills elite without doing the work to earn their way into the top 10%.

It appears that the psychology of the nation transformed in the early 1980s.

Was it the optimistic message of “Morning in America” preached to the country by Ronald Reagan? Was it because the youngest Baby Boomers were turning 35, entering their prime spending years? Or, was it the long-term decline in interest rates from 18% to 1% over two decades? Whatever the rationale, millions are now drowning in a deep pool of debt.

Auto Nation

There are 230 million cars in the US and about 200 million drivers. We are a car-crazed nation, with the number of cars per person 40% higher than Europe, 500% higher than China and 6,200% more than India.

In 1970, when I was seven, the number of cars per 1,000 people was 529. Today, it's 765, a 45% increase in three decades. Suburban dwellers have a love affair with their cars.

The average price of a new car now exceeds $30,000. That is a nice chunk of change. I have a mental block paying that much money for an asset that losses 20% of its value in the first year of ownership.

My price limit is $20,000. I finance my cars over four years and try to get 10 years out of them. The six years of no payments goes directly into savings.

My frugality probably harks back to my father buying used cars throughout my childhood -- when it seemed cars were a means of transportation, not a symbol of success.

It appears that expensive luxury cars are often an attempt at filling a psychological or emotional void in people’s lives. We spend half our lives in cubicles or offices and the other half in our houses with gates and fences to keep people at a distance. The only time we are seen by others is on the highways and byways. An expensive sports car tells the world you are a success and is a futile attempt at increasing your perceived happiness.

This brings me to the conundrum that has confounded me as I drive to work each day. There appear to be many more BMW and Mercedes vehicles on the road than people with enough income to own one of these vehicles. How can this be?