This is a very good point, not only should you back everything on you computer or computers, but i think if it is sensitive enough, based on your own judgement of course, you should also probably encrypt it as well. Some OS's will have an option built in but there are a few applications out there as well that you can download that will help you with this task. Personally i would recommend having a couple of backups in a couple of different locations, again based on how important the information is to you. I personally have 1 back up for each computer that i have ready to go and also i have another for each in a different more secure location, in case of theft or or fire, or something of that nature were to happen to my "ready to go" backups.