OS X: Installing OS X On An External Volume

A new Apple Knowledge Base article says some disk partition configurations may result in the OS X installer reporting that it could not create a Recovery System. If this happens, and you are unable to install or upgrade OS X, you may need to backup and erase your hard disk first. You can use Internet Recovery, or Recovery Disk Assistant to do this. You can also install OS X on an external volume.

This article describes steps to install OS X from your Mac to an external USB, FireWire, SDHC or SDXC card, or a Thunderbolt storage device.

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