I have to challenge this question; why, again, do you want to host your own? Not only is it likely that your ISP won't allow you to host this server, but when you say "4 mbps brodband connection", I'm assuming you're talking about download speeds--and not necessarily upload speeds.
In the server world, privacy isn't so much of an issue with the geological location of the server--after all, if someone can log in to your server and access your data locally, there's little reason why they wouldn't be able to do so remotely. That being said, there are also a variety of ways of encrypting data at the file system and database levels both, if you're worried about someone physically accessing your data.
Keep in mind, reputation is everything for a server provider. For example, if Rackspace were to get broken into and have hard drives physically removed, or an employee were to do so against the user's will, their brand would be over. Security is not a joke, and this should not be your primary reason for wanting to roll your own server.
All in all, I think you need to reconsider what you're trying to do. There's simply no way you're going to cover redundancy, bandwidth, support, environmental controls, and general server maintenance entirely on your own. And even though a lot of people on SF could potentially do this, the majority will not, because the cost-to-benefit ratio is awful.
Instead, what you might want to ask is, "I'm storing sensitive data in a database, how can I make sure this is secure?"