There are lots of people making more than $500 a month. I am one of them...
So, how is this done?
I use the wash-rinse-repeat method:
a) Keyword research (tip: don't go after the high paying keywords, those are virtually impossible to get good rankings for)
b) Decide on a suitable domain name, based on the keyword(s). It's often a complete phrase, since it has less competition and it's also easier to find an available domain.
c) Create Content
d) Upload to your host.
a) I have already made a post about Tag & Ping on another forum.
b) You can submit your site to many directories as well.
c) Use some of your content as posts to n article directories, with a backlink in your signature)
d) Participate in forums related to your keyword/niche
Do it all over again, using a new keyword/niche.
Tips to achieve such goal:
Once you got your earnings coming, use those to fund your growth. Find a cheap domain name registrar - less than $10/per year for a .com is acceptable:
Get lots of hosting accounts in order to get the sites on different IP addresses: