I do both. Some of my made up stories are so boring, that sometimes i realise that ive started thinking of something else but am still telling the story. DD doesnt notice though. I often tell stories i liked as a child and sometimes tell the same story with dd and her friends names, she doesnt notice that either, usually folk of the faraway tree.
books are great but kids love stories about themselves too. It's easy to make uo stories if you don't try to be JK Rowling. It's amazing how easily satisfied my dss are at my rubbishy made up stories!
Easy rules for making up stories
1)your child is always the hero
2) take some mundane real event from that day such as a trip to the supermarket
3)put some magic in it e.g. a flying shopping trolley, talking tin of beans that gives three wishes, a fairy frozen in the fish cabinet
4)your hero child sorts out the muddle, saves the day, gets a medal etc
5) and they all live happily ever after!
I have to say I am one of those people who can make up a story for 20 minutes at a time and I do it quite a lot...but who cares we are all good at different things and just because you don't do this means nothing, if anything you know your limitations and you pass on a very normal and honest kind of approach to your children, they don't want an artificial figure, be yourself at all times, it's the best way to a happy life.
I'm too mentally lazy to make up stories, and anyway dd likes pictures! She doesn't get bored of our bed time reading however because I have discovered that charity shops are great places for picking up kids books at 30p per time. Consequently she has an overflowing bookcase.
SQ its lucky I know you because otherwise I'd say we were the same woman married to the same man. DH similarly good at making up stories, and if necessary, illustrating them. I haven't a creative bone in my body. At least DD is now old enough to know which of us to ask to do what in our house. Though she says I'm "quite good" at colouring in. (Oh the shame!)
I do a bit of both. DD adores books though - we have hundreds! - and she will sit and look through and pretend to read books constantly, and we do read a lot. I am rubbish at making up my own stories but we do sometimes. They tend to be more about what we have done and little adventures she might have had during that time. She seems happy enough. But they are very poor! I prefer reading books to her TBH.
when i was a child, my dad either made up stories, read books to me, or my FAVOURITE of all time, was nursery rhymes... we used to go through all the nursery rhymes before bed in a certain order and i used to tell him off if he had missed one out!!!!
My freind used to tell her daughter stories from her own childhood at bedtimes as well as reading books. She loved them and it was weird when I met her once and this 6 year old could reel off all our old school anecdotes.