There are both rewards and punishments to online writing career. The rewards are flexibility and freedom and in many cases handsome remuneration. A majority of the online freelance writers are struggling writers. But then, most of them also have a day job and are happy with some additional income. There are other writers including students and housewives who need just about some additional income.
Problems the online freelance writers face
If you are not from a nation where English is the first language, you will not get many higher paying jobs. Writing companies like Demand Studios, Text Broker, and several more with decent flow of jobs and fairly standard pay per article have closed their gates to entry for writers whose native language is not English. I am also one of their victims. Yahoo Content Network doesn't even pay residual income to non-U.S writers although you are free to write for them. Most of the unpaid writers probably write for them just to build the links to their blogs, which has its own rewards.
Additionally, for every legitimate online paying sites, there are five to ten scams. A beginning writer may fall in their trap. However, there is a strategy to choose a site to write for. It is highly recommended that you check the background of the site. It can be as easy as using the search term "(name of the site) Review" in Google. Read the reviews, you will most likely have some idea about the site.
Which writing sites to avoid
If a site does not give their physical address, phone number and other details, it is best to avoid them. However, in many cases, I have been paid regularly by them. So, what I stated is not a hard and fast, strict strategy. However, just in case they run away with your money, there's nothing you can do. Most of the scam online writing companies, according to sources are from India, Pakistan, Nigeria and Ukraine.
Which is the place to begin writing
Some of the companies I found legitimate and well paying are Independent Publishing (The minimum pay for a bronze writer is $4.66 for a 250-word write up and goes up several times over for silver and gold writers). However, they are not always flooded with jobs, but when the jobs come pouring in they are more than you can handle. So you can earn fairly good income within a span of few weeks when jobs exist on their job boards.
The other good writing company is Content Current. They pay about $7 for an article of about 400 words. This company also cannot assure you with year round flow of jobs. But you need to keep checking their dashboard. I didn't. So, they kicked me out for my inactivity.
Recently, I came across another site called Scripted. Their pay rate is probably one among the best. You can hope to earn anywhere from $24 to $150 for a 450 word blog post. Also, you cannot write for any niche you may want to but only for those you are selected to write out of about 15 to 20 niches. They are very strict on deadlines and quality. Make a mistake on any of the two, and you're kicked out for good.
There are many more sites that you can try.
How to overcome the problems you face
A writer attempting to make living off online writing may face the basic problem every freelance writer faces sometime or the other. You may not always have enough work or jobs that pay well. This problem can be addressed only over a time, and not overnight.
(i) Multiple sources: It is best to subscribe to several jobs rather than remain stuck with one source.
(ii) Build residual income source: When you begin building residual income source on hubpages and Squiddo, or other sources, you will eventually find an additional revenue stream paying you month after month.
(iii) Continue to bid: Companies like elance, ODesk, and Guru are among the top companies for freelancers. There are several more. As you persist in bidding for jobs at these sites, you will eventually begin getting jobs.
(iv) Build your blog: You may begin with free blog available at Blogger or Wordpress. There are several more companies that offer free blog. It will take few minutes to set up your free blog and you may begin posting immediately. It will showcase your talent. You may eventually consider switching to paid blog @ up to $10 or less per year.
(v) There is a very wonderful site called fanBox. You can post almost anything there. They allow you to plagiarize and post articles directly from other sites and pay you as well. They offer multiple opportunities to earn from posting, categorizing and rating, selling your products and services and many more.
However, I would like to caution beginning writers not to leave their day job for a while. Once, you are better established in the online world with regular online income, you may consider bidding your day job a good bye.