What is the best place to store passwords?

I've come to a point where I have too many passwords to remember. I usually use the same passwords, or at least a similar sequence of characters for most of my passwords, whether they be my sites, sites I've signed up with, or work passwords. But I am getting to the point where I am not feeling secure anymore to so that, and it is getting annoying having to try remember each password all the time. Obviously, the most secure is to store the passwords in your head. But, as I said, this is no longer an option for me.

The browser will auto fill many of the passwords, but then I tend to forget what the actual password is and if I need to log in through a different computer if takes a few trial and errors untiol I 'find' my password again. So, I am looking for a password storage place to help me out, but at the same time not compromise security.

The simplist solution would be to write everything down on a sheet of paper, or on an index card and keep it near the computer. This has two problems, one is the security involved, if you have passwords to banking sites for example, maybe you wouldn't write those ones down. But the other problem is that it doesn't help you very much if you are away from your regular computer.

You can always carry a note card or business card in your wallet though. I suggest if you do that, to encrypt your passwords in such a way that if someone else finds these passwords, they still won't work. For example, when you write the password down, just turn all the '1's into 'L's, or '2's into 's's, or any variation that you will remember. You can invert all the passwords reading from right to left as another example. There are lots of ways to to do this, bascially it is just away to help you remember your password without having to write the actual password. This way if someone else comes across your website list and passwords, you will still be safe.

The same goes if you keep your passwords on a non-encrypted file on your computer, like a word documnet or excel file. I would recommend not to do this, but if you do for conveniece sake, use the method above of altering characters to keep your passwords safe.

There are also programs made specifically to store passwords, some of them free like Whisper32 XP. Personally I would not use a program to do this. Maybe I am paranoid, but programs like this make a nice target for hackers and you can never know if that program was somehow comprimised.

I feel safer not putting my passwords on to the computer itself. At least if they are written down in an altered form, I have more control. If they are on the computer in a file of some sort, you may never know if it was accessed.

Hopefully this has given you some ideas about where to store your passwords and how to do it safely.