I lost a lot of money as well, and I was doing things on a very sophisticated level. I had people working for me, and we had an incredible system. But I think I missed just a couple things that caused goog to index my sites less and ban more quickly. That's all it took. A couple things and that were devaluating my 100s of sites which where getting all traffic from SERPS.
So I stopped. I think if you're comfortable with it, you really need to cast a wider net and do some of what you do for other businesses. Why? Because they may have a "real" brand behind them. AND, if you do IM work for a company that has a good site because works gone into it overtime, you get on the inside and see what's making a big site work.
I wish I'd worked for an interactive agency for a while. Not one with fortune 1000 companies, but at least million dollar companies.
I know someone that's been a CTO of an SEO co. for over 5 years and is STILL working for them! I'm shocked that he's not off on his own. I think that says something about how hard it is to just do it alone. He's a brilliant guy, I shit you not.
No way are they paying him more than 120K or even 90K a year. BUT, I haven't talked to him lately, and maybe he does do a lot on the side now.