Stop working for someone else and start your own company. Do contract work to fund it. That simple. Working costs money, gas, car insurance based on mileage, more tune-up/maintenance, work clothes, always buying lunch, etc....It really adds up to a lot, working from home is dirt cheap, and way healthier, not dirty office air or commute. Make a budget and stick to it and build yourself a company. Look around at the sheer number of business out there today? They literally go into the horizon. They all need software, just build something that sells, not another social network like everyone else. I met someone a while ago, builds a web based dental management solution, charges 450/month, a drop in the bucket for a dental office, they love it, never worry about backups, etc...I know a dude who builds salon management software, charges 1200/year. Just go narrow and specific, not wide and general, and you will never worry about big competition. Partner with someone in a specific industry and get it done.
I did this and I feel awesome. If I don't feel like working on a monday, I don't, if I have brilliant idea at 3:00 am, I implement it. Huge productivity gain, plus no water cooler talk to slow you down.
My advice is: Find a much bigger pond.
I've given up on startups and entrepreneurial nonsense. I finally had to accept that it is not for me. It all sounded great, and I wanted it to work so bad, but after working for three small companies, I got totally sick of all their bull$hit nonsense, lousy management, and stupid decision making. The people doing the work rarely see any of the rewards in small companies and it's all just push, push, push, enough is never enough.
I now work for a really big company and I could not be happier. I contracted for a year to test the waters and now I am just about to go fulltime.
There are good big companies, you have to find them. You may have to move to another state--that's one thing I did that changed my career completely.
Software development is not for everyone. At times, I fantasize about doing something else. But where else can I make such a reliable income, indoors, and be around mostly intelligent (if not sometimes boring) people?
Find a place where the management rises from the ranks of the developers. You may have to do consulting for awhile and try out a few different places