There are literally hundreds of ways for someone with programming skills to earn money online - and make more money than hourly wages. Here are just a few to get you started:
1) Setup a profile on Odesk / Elance. Showcase your programming skills and start bidding on projects. There are thousands of eager buyers there. Sure you will be competing with programmers from India/Russia/Phillipines - but you can underbid them all and buyers in the US will hire you - as being in the US and cheaper than offshore programmers will be a huge plus for you.
2) Buy a domain name and build websites using Wordpress/Joomla/Drupal (pick any one), get a domain name for $8.00, use one of thousands of free themes, add some content, RSS feeds, add Google Adsense (all free), drive some traffic using SEO techniques. Then list the site for sale on Flippa, Ebay, Craigslist or any of the other sites to sell stuff. You can easily sell a site for anywhere from $50 to $500. Sell one site for $250 per week = $1000 per month.
3) Setup a site, Sign up for affiliate programs (Commission Juntcion, Linkshare, Amazon ...), Drive traffic and earn affiliate commissions.
4) Market complete websites to small business for under $500 using the technique in (2) above.
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I tried elance. They have a convoluted point system where you can bid on ~10 projects a month. I put in the lowest bid for a bunch of simple <500$ projects, but had no responses. They are lots of indian and russian contracting firms on there spamming every job.
Would you be interested in working with me on a couple of Twitter related projects? Currently outsourcing on ODesk, but can definitely consider using you. Let me know!
Elance is a bit harder - since they charge for premium placements to appear in search. Have you tried Odesk, Rentacoder (and a few more sites). Or even Fiverr seriously. The key is not to give up - getting the first job is the hardest, after which you end up usually getting a client, and establishing a profile/trackrecord. I know, we have been on both sides of this (as a contractor/hiring people on our own projects).
You are better off going through craigslist. I've been able to find tons of projects on craigslist in the last couple of years. Many companies are looking for a reliable freelancer/contractor and if you can prove that you are, will go to you for future projects.
4) Market complete websites to small business for under $500 using the technique in (2) above. ....