writing stories

I have started, and deleted, the beginnings of my story/novel/work-of-fiction/chicklit/whatever it ends up being/ numerous times. I think the problem is that I keep trying for a particular genre each starting, and it never ends up that way. I am pretty sure that I understand why. One of te first things that any write will tell you is "Write what you know." Up till now, I have avoided doing that. I have a fairly weird family and extended family-including my in-laws, notoriously bad relations with my dad and step-mom, and a string of bad rellationships(including a marriage) that went on for too long, before I had kids, settled down, and got married-in that order. I have felt that if I write what I know, even if I turn it into "fiction", too many people close to me will recognize themselves, and be hurt or upset. Just recently, I came to a conclusion-Fuck IT!! If my friends and family and ex friends and ex family recognize themselves in my writing(if it ever gets published) and become upset by what they read, I hope they realize a few things.
Some Key Points
1) It is essentially a work of fiction, with my real life experiences used as references, some characters will be made of more than a single persons personality traits, and others will be exagerated, as I see fit.
2) Maybe if you are unhappy with how you feel your character was portrayed, you need to look at how I may see you, and why I see you that way, or if the character is even based on you in the first place.
3) if you are my dad, than yeah-I am pissed at you, and If given half a chance, will pro'lly make you into a pathetic dried up person, or a monster, or just leave you the way you are, and tell you everything I ever wanted to say to you but didn't have the guts, and hope you recognize yourself.
4) Once again, this will essentially be FICTION-fiction is false, entertaining, and not holden to reality-just because a character in my book is the sister of the narrator, does not mean she is my sister, and the narrator is not necessarily me.
5) if there is a crazy hat woman, she may or may not be based loosely on my mom
6) If the narrators or main characters relationships come into play-I will prolly make them much more numerous and scandalous than my relations have ever been, to make for better reading
7) I am not a monkey, this is not a type writer, this will not be shakespeare