For memorising books, do you prefer a notepad or annotating the margins?

Keeping a notepad and taking time to write down impressions after a reading session (or after finishing a section/chapter/book) has been helpful in retaining key takeaways from texts. It's also surprisingly enjoyable to write about what impact non-fiction had on you as well so I definitely think this works for all sorts of reading. And of course if something strikes me in the middle of reading, I've got a notebook to in as well.

Besides that, and somewhat related to your question, starting/joining a book club was one of the more enjoyable things I did in my reading life. Get a group of people together and spend some time talking about what you're reading! In my case, we weren't even reading the same books, it was just another place to talk through things that really hit home while we were reading.

edit: and of course I come across an article about a silent book club here on HN right after writing this. Book clubs are for everyone but I think the format here can help broaden the audience https://news.ycombinator.com/item?id=22023996

Annotating in the margins. No reason to keep the notes and source material separate if it can be avoided.

Also use a pen for underlining. That way you don’t have to switch utensils if using a highlighter when you write in the margins.

I read everything on a kindle, use kindle highlights, and then when I am done with the book (or even better, while im reading it) dump the highlights into Anki and create different cards from them -- this method has worked well for me for the past 3 years. I plan on doing it for the rest of my life.

Using an SRS like Anki will be more effective than any note-taking system, assuming that you do the cards everyday.

Are you trying to memorize the book?

Or are you trying to learn to apply the mental models?

Notes on paper --> Create/upload on Anki (SRS). Then open the Anki app daily.