To the uninitiated, the rules of hyphenation in English seem a lot like the rules for spelling—nonsensical and irrational. But hyphenation has its own set of logic, I promise you. Once you know the pattern, you're likely to sail through hyphenation in most of your daily business writing.

Let's start with some examples to set the stage:

The fees must be paid up front.

The up-front sales are expected to diminish in the third quarter.

Both of these uses of “up front” are correct. So why are they hyphenated differently?

The quick answer is that hyphenation is used as needed (this point is key) to help the reader quickly grasp what words form larger units of meaning. Generally, a reader can quickly identify which words form a bigger idea. But sometimes it's not obvious which words go together, particularly when the words are in an unusual combination. Enter the hyphen, a punctuation mark designed to reduce, if not eliminate, this kind of ambiguity.

Of course, hyphenation is not the only way that compound terms (that is, ideas made up of multiple words) are formed. Because English is all about options, it offers three methods by which we can form compound terms :

Open (with a space between words):  graduate student housing

Closed/solid (no space): website

Hyphenated (either using a hyphen or an en dash):  cross-section

Whether you decide to style a term as open, closed, or hyphenated is a decision determined a) by the dictionary you choose and b) by the style guidelines you follow. Note that this means that you might choose to style a word as “healthcare” and another person might use “health care” (with a space between the words) and both uses are correct according to the dictionary and style guide each person follows. (Hyphenation is one place in which dictionaries tend to differ.)

Compound terms tend to have a particular life cycle. Short, unfamiliar terms are hyphenated when new (for example, “e-mail”) and then closed up when accepted into the language (“email”). Longer terms remain open if there’s basically no chance a reader will misread a term without the hyphen, but they are hyphenated if the reader is likely to stumble or if a hyphen eliminates ambiguity.

Therefore, we do not hyphenate “real estate market,” because “real estate” is easily recognizable as one idea, and “market” doesn't blend more strongly with “estate” than “real” does.

However, we hyphenate terms like “high-net-worth investor” to make it clear that “high net worth” is all one idea that describes the type of investor we’re talking about and because the reader might otherwise get tripped up if we don't smooth their path.

The good news about hyphenation is that it generally follows predictable patterns. Here are the basic rules for hyphenating compounds:

1. Your dictionary-of-choice is the ultimate arbiter. If the dictionary hyphenates a term everywhere, then you should as well. Common compounds that are always hyphenated are terms that use “self” and “cross,” fractions (such as “two-thirds),” and words where the hyphen clarifies meaning (and pronunciation), such as “recreate” vs. “re-create.” (Unless you're British. The Brits don't seem to follow this helpful distinction.) If you're not sure whether a term is open, closed, or hyphenated generally, look it up. That will at least tell you if you have to decide for yourself based on preference and usage (“plug-in”/“plugin”/“plug in”) or whether the dictionary has a firm ruling on this (e.g., “up-to-date” is always hyphenated according to Merriam-Webster).
2. Compound adjectives are not hyphenated if they are used after the noun (unless the dictionary does; see #1). Most major style houses (the Associated Press is a major exception here) recommend hyphenation for terms that occur before the noun and almost never if they follow the noun. A common example here is “well-known author” vs. “an author who is well known.”
3. Easily recognizable open compounds stay open, even if attached to other adjectives—this is how we get terms like “real estate–related” and “pre–World War One.” Note the use of the longer en dash (–) instead of the shorter hyphen (-) to connect the terms. (The use of the en dash here is an editorial nicety. The use of the en dash means that you are connecting a modifier ["pre"] to a recognized open compound ["World War One"]. You don't really need know this tidbit, but I include it for the highly motivated grammarian. You know who you are.)
4. Compound adjectives that use qualifiers like high or low are almost always hyphenated before the noun for readability. 
5. Similarly, if your compound term can be misread, then you should hyphenate. Copyediting master Amy Einsohn proves how significant a hyphen can be in her example “four year-old boys” vs. “four-year-old boys” from her book The Copyeditor's Handbook. And the Chicago Manual of Style provides the excellent example of “much needed clothing.” Is the clothing needed a lot (“much-needed”) or is there a lot of it (“much needed”)? Only a hyphen will tell you.
6. Adverbs that end in “ly” are not hyphenated. The “ly” at the end of a word is sufficient to signal the reader that the adverb goes with the word that follows it, so hyphenation is not necessary. Are there “ly” words that get hyphenated? Yes, see #7.
7. Parts of speech matter a lot in hyphenation. Some “ly” words are adjectives and therefore they are treated like any other compound adjective phrase. A common example is any phrase that uses “early” as an adjective rather than as an adverb, such as “early-morning train.” Part of speech also explains the difference between “up front” and “up-front” in this article’s initial examples, where the first instance is an adverbial phrase after the verb (“must be paid” When? “up front”), and the second is a compound adjective before a noun (“up-front sales”).

Hyphenation rules, like anything else in language, can be complicated and full of nuance. Pick a dictionary to rely on, follow these basic guidelines, and consider whether hyphenating or closing up a term reduces the chances of misreading. If it helps, then you're probably doing it right!