OhSnapWord
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Your really saying that it does not have to be accurate or reliable for every situation, Rule of thumb - Wikipedia, the free encyclopedia
What I'm saying is that generally the backup drive should be at least the same size as the drive you're backing up. Is it positively necessary? No. However it does need to be large enough to accommodate the data you plan to back up.
...Sure I'd like to have a large drive in my system but my only concern is how to back it up...
External drives are the way to go for the average Joe user when it comes to backup. The odds of your hard drive and backup drive going belly up at the same time are pretty slim. Of course there are cloud-based backup solutions that will backup all of your data, however those are only good as a backup of a backup and are only effective if you have an always-on broadband internet connection.
If I do a low-cost RAID...
Don't get me wrong, I like RAID. I like RAID a lot.
RAID is not a backup solution. It was never meant to be a backup solution. The intent and purpose of RAID is maximum performance and uptime. if you're running a RAID 1, 5, 6 or 0+1/1+0, if one of the drives goes down, you could swap it out and the array will rebuild with no downtime if the system supports hot-swap. RAID will not protect you if you accidentally delete a file, the OS becomes corrupt or a virus wipes out your data. You would be just as screwed as you would be if you're running a single drive.