Time Machine works with multiple disks
I guess I am a little paranoid about backups...
I have a Time Capsule, an external portable drive plugged into an Airport Extreme (which extends our home WiFi network), and a Synology DiskStation 212.
You can tell Time Machine on your Mac about multiple backup disks (I did that) and it will cycle through them, one each hour, backing up to all of them.
Of course, each disk now holds backups every 3 hours instead of 1, but any disk can fail and I still have two more.
You can also manually plug one or more external hard drives directly into your mac for Time Machine to use. But you then have to remember to do that.
I can recommend the Synology DiskStation, which sits on the LAN and supplies NAS storage, among a lot of other nice things. Mine has two 2 TB disks in a RAID1 configuration (mirroring) so, one of those can fail without losing my data.
Synology also have a very nice web-based user interface - much better than the NetGear ReadyNAS, IMHO. It supports Time Machine and iTunes streaming, as well as providing services like email, web server, photo storage...
If my house burns down, I could lose everything I guess.
So perhaps I should buy iCloud space as well. Or at least keep a backup disk off-site.
PS The backup space is not just for me, but it supports other family Macs as well.