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its fine for one file at a time transfers, but not accessing multiple files at the same time
It can be fine, if you do it a certain way. The USB Caddy or Retail External Drive needs to support something like USB 3.2 or 4.0 along with the PC as well. USB 3.0/3.1 is rather slow in comparison, especially if it's an NVME type of drive.
Then when you go to handle your games, have Steam download the game to internal SSD. When it's all done, verify the game. Then when that's done, use the Steam Move option to move it to your External Drive. However you first should setup any External Drive so that the Drive Letter is removed, then re-assigned to a letter much further down, like R, S, T.... for example. So that if you were to unplug the external, then plug in another external, or flash drive, that the newly connected drive doesn't take the drive letter that your games drive would be using should you reconnect that later while other drives are connected. WinOS will remember assigned drive letters IF you manually change them.
However there are some pre-cautions you need to consider as well, any game client that is one where you know it has a game installed to the external, it is best to always connect that external BEFORE you ever launch that game client, even if it's others like EA, UBI, EPIC, GOG, Amazon, Google Play, Battle-dot-NET; etc.
If you launch Steam for example and you happen to have games on an external and that is not already connected, this is OK, as long as you do not want to mess with that game right now. And it will show as greyed-out since Steam can't find that Steam Library on your PC where such games are housed on an external drive. If you forget and then realize this, simply exit that game client fully. Then connect the external drive in question that has those games, then re-launch the needed game client and it should then see those games on the external. And again, for that to work the drive letter for said drive needs to remain the same at all times once you've configured a game client to look at a certain location for a game library.
Also, I have run an OS, and thus, tried to run other stuff on a USB stick...you don't want to do that...it's, as _|_ said, slow as all hell to run through USB....and that wasn't gaming. I bet if I tried to play chess it would crash. It was enough to do a test install of a Linux distro and then switch to said Linux distro, but it was agonizing
Even USB 3.2, for gaming, it won't run well. It's going to try to load fast, but it can't due to USB limitations, so most likely your gaming experience will feel choppy. Not smooth like on a hdd with long loading screens, just endlessly choppy due to the limited bandwidth.
Always buy internal drives and the required accessories to make it an external. Why do this or go through that? Because you will often find that internal drives more often then not have better warranty coverage and quality overall. That means you are never voiding the warranty by opening the external caddy to make other use of that drive, or to plug in internally in-case the external caddy fails, goes bad, etc.
There are tons of external caddy choices for SATA and NVME Drives. However you will need to go to their sources and ensure the specs are correct. Do not rely on what places like BestBuy, Walmart, Amazon, Newegg list for the specs...
Make sure the external caddy supports larger drive sizes if you are buying a larger drive such as a very large (like 8TB+ HDD) or an SSD larger then 4TB.
If the caddy is for NVME, make sure it supports the PCIE Generation of your SSD, or beyond what you intend to use so you know it will work properly in such caddy. For example you wouldn't want to just go buy some really cheap caddy for NVME then find out later it can't support PCIE 4.0 / 5.0 NVME SSDs.
Same goes for any USB Flash Drive, SD/MicroSD cards; look up the model outside of the place of purchase and ensure it's "real" and not "fake" and that the specs are correct and what you really want. Some retails are not always listing correct information or including ALL of the information from the manufacturer
Saying from my experience, you can install games on portable SSD and it will work.
SSDs will be fine if they run from USB powering them. You will need an additional power supply if you are going to use a 3.5 inch HHD, which you won't do anyway.
Not sure what you mean by "is it possible to have steam installed on both the internal and portable ssd, would that help".
Running from USB 3.0 isn't too bad for most games.
Acer Aspire TC-885-UA91 Desktop, 9th Gen Intel Core i3-9100 @ 3.60GHz 3.60 GHz, 32GB DDR4, 512GB SSD,NVIDIA GeForce GTX 1050 Ti 8X DVD, 802.11AC Wifi, USB 3.1 Type C
Why not just get a cheap 2TB SATA SSD? Like WD BLUE or Crucial MX500
That's BS. I ran BG3 just fine ona 4790K with 16GB RAM and RTX 3060