I do not think current external SSD Thunderbolt 3 storage (less than 3 GB/s) provides the same level of performance as an internal SSD.
Here are some data for M1 Mac-Mini internal SSD data transfer rates (4-25 GB/sec). Also, external Thunderbolt 3 SSD devices are expensive. While USB 4 ( a non-licensed version of Thunderbolt 3) devices are
rare right now, USB 4 supports 20 to 40 GB/s with using the appropriate cables.
For a lot of data types, external storage using USB-C 3.1 Gen1 (5 Gb/s) USB-C 3.1 Gen2 (10 Gb/s) is sufficient and cost effective. This assumes one uses cables the support these transfer rates.
I think the question is how dependent are the still photography, video and, or graphics applications you prefer to on data transfer rate? For example, I would be surprised if the most recent Photoshop and Lightroom Classic apps were not slower using USB-C 3.1 Gen2 external storage compared to the internal SSD. Thunderbolt 3, 1 TB SSD devices with transfer rates of 2.2 to 2.5 GB/s cost about $300. These are slower than the M1 Mac-Mini internal SSD.