That's what fiction is, right?
I love to make stuff up. I mix up a few people I know together, immerse them in the Seven Deadly Sins, then I begin the story .Mary Firmin, author Deadly Pleasures.
I love playing the "What if" game -- What if a woman has an affair with a married man, and they get into a car accident together -- and he dies? Where does that leave the mistress -- and the wife? What if the mistress goes to meet the wife, who turns out to be pregnant?
Most of my "what ifs" come from real life. I see a situation or experience something myself, and one corner of my brain automatically starts the game. It's so much fun, and I've gotten so many great ideas that way!
Lots of my story ideas come from dreams, I've found.