“The password system is broken” – I don’t know how often I’ve heard that phrase already. Yes, passwords suck. Nobody can be expected to remember passwords for dozens of websites. Websites enforcing arbitrary complexity rules (“between 5 and 7 characters, containing at least two-upper case letters and a dog’s name”) doesn’t make it any better. So far I’ve heard of three common strategies to deal with passwords: write them down, use the same one everywhere or just hit “forgot password” every time you access the website. None of these are particularly secure or recommendable, and IMHO neither are the suggestions to derive passwords via more or less complicated manual algorithms.
As none of the password killing solutions gained significant traction so far, password managers still seem to be the best choice for now. However, these often have the disadvantage of relying on a third-party service which you have to trust or storing your passwords on disk so that you have to trust their crypto. But there is also this ancient idea to derive individual passwords from a single master password via one-way hashing functions. This is great as the only sensitive piece of data is your master password, and this one you can hopefully just remember.