Intel core i7 upgrade or 1TB SSD on a 2020 Mac mini?

Well, there's more than one way to go but the way I set things up I don't need my boot drive to be any bigger than 512gig.

Main reason is if my main computer goes down (either the internal drive dies or some other hardware issue) I can plug the external into a backup machine and carry straight on. That along with keeping OS processes on the boot drive and my projects on a dedicated drive are my two main reasons.

If you're going to put aal your stuff, OS, and projects on the boot drive then you'll thank yourself for getting the 1TB.

But for me, if it was a choice beterrn the drive size and the processor, I'd go for the more pwerful processor.

I'd go for the i7 upgrade and for project storage a Thunderbolt 3 external drive.

Thunderbolt 3, yes. Also, the external won't be doing/accessing all the things the system needs to access during the normal running of your computer.

The boot drive does things in the background. An external will separate this so it's dedicated to your audio.

That's why I love my old Mac Pro. I have 4 drives in there. Bay 1: Dedicated OS/App drive. Bay 2: Project drive. Bay 3: Sample Library. Bay 4: BAckup for boot drive.

I have a Mac mini system and an iMac system (backup and test platform) that I use the same Thunderbolt drive as external storage. Works a treat. I backup the thunderblot at the end of each day with whatever I've been working on that day.

Hope this helps.