I have an unusual setup that I built myself from scratch. My primary PC has a 128 GB SSD for its system and application files, a 2 TB 10,000 rpm internal drive for my primary data files ("My Docments," "My Pictures" etc.), a 3 TB internal drive for media files (movies and music), and a 4 TB external drive for backups and other dead storage. Storage is cheap, so why scrimp?
I backup all my data and pictures periodically to my external 4 TB drive, and backup both of my wife's computers user data to that same 4 TB drive. I figure that, sure, if my house burned down suddenly I run a risk of losing it, but it would have to burn down REAL quick for me to be unable to save the easily physically accessible external drive to which everything is backed up.
Because my system is on a UPS, the odds of both of my hard drives failing simultaneously is genuinely minuscule. And as far as a fire goes, I don't live in any arid western canyon area so I trust that we aren't going to suffer that sort of conflagration a LOT more than I trust the cloud. Hey, we don't even smoke.

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