These guys are all correct but I have some reads for you that were thought out well in advance.
Here’s an essay on sorting hosted on the brothers brick, the most famous cool model of the day blog
Sorting, organizing, and storing your LEGO – the second hobby [Essay]
and here’s a short read for some insight into how I personally do it.
http://z3mata.tumblr.com/post/83346579185/can-you-explain-how-you-have-your-lego-organized
Good luck and come back if you have more questions!