I used to use a single password for everything, from banking to my Unix account at work. It's a miracle I never had a break-in. I now use several passwords, all completely scrambled based on the formula above. Now you, like me, have no excuse not to keep your online life securely locked up!
Start with an original but memorable phrase. For this exercise, let's use these two sentences: I like to eat bagels at the airport and My first Cadillac was a real lemon so I bought a Toyota. The phrase can have something to do with your life or it can be a random collection of words—just make sure it's something you can remember. That's the key: Because a mnemonic is easy to remember, you don't have to write it down anywhere. (If you can't remember it without writing it down, it's not a good mnemonic.) This reduces the chance that someone will guess it if he gets into your computer or your e-mail. What's more, a relatively simple mnemonic can be turned into a fanatically difficult password.
Which brings us to Step 2: Turn your phrase into an acronym. Be sure to use some numbers and symbols and capital letters, too. I like to eat bagels at the airport becomes Ilteb@ta, and My first Cadillac was a real lemon so I bought a Toyota is M1stCwarlsIbaT.
*Yes, I know that a cracker .NE. haX0r, but most people think "cracker" means something else, entirely.