In former times, making note of passwords was the worst sin for a sys admin. It turned out that many were tempted to use passwords that were easy to remember and therefore often too weak. There are ways to create passwords that are easy to memorize and difficult to crack by brute force attacks. However, the more passwords you have to manage the more difficult it gets to keep track of them. Thus I usually use random passwords and store them in a safe place. Of course, this is not 100% secure either, because if someone gets access to your password store, you will have a serious problem.
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The minimum one should do is to encrypt the passwords. There are countless free password management tools for Windows. My favorite is Locknote, because it is allows me to encrypt all kinds of confidential data in a simple text editor. Another way is to store your passwords on your Smartphone or Pocket PC. This way, you will always have your passwords with you. There are many commercial password management tools for Windows Mobile, but I’ve only found one that is free.
DocLock is a very simple tool, but I think it has all the essential features. Its name is a bit misleading, because you can’t use it to encrypt documents. It is a typical password management tool that creates different entries for each password. Passwords are encrypted with 192bit TripleDES, and the master password is stored as an MD5 hash. DocLock shuts down automatically after two minutes. If you forget to log off, nobody will get access to your passwords by just grabbing your phone. You can configure the maximum number of login tries and the retention hours.
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How do you manage your passwords?